Vitrolife Aktie

Welcome to Vitrolife Q1 2026 Earnings Call. [Operator Instructions]

Now I will hand the conference over to CEO, Bronwyn Brophy; and CFO, Par Ihrskog. Please go ahead.

Good morning, everyone, and welcome to the Vitrolife Group Q1 2026 Earnings Call. Thank you for dialing in. I am joined by Par Ihrskog, the CFO of the Vitrolife Group. And I'd like to start this morning and today's presentation by providing you with an update on the latest dynamics that we are seeing in the reproductive health market. I've broken this down into 3 key areas. Markets or regions, customers and competitors. So let's start with the markets.

What we're seeing is European IVF cycles are remaining stable. We see cycle growth rates starting to increase in North America after a slow start to the year. And what I would point out is we're starting to see an increased seasonality there, whereby January is a particularly slow month and the growth tends to accelerate as the calendar year progresses.

Middle East IVF cycle activity is significantly down as one would reasonably expect given the geopolitical situation. In APAC, the markets are performing stronger than expected, but I would like to point out that Q1 2025 was exceptionally low. And then the other dynamic that we are seeing is an increase in regulation of genetic testing. We welcome this as we believe it's in the best interest of patients. The Vitrolife Group has a lot of competence in the area of regulatory affairs and market access in general.

I'll now move over to discuss the customers. Consolidation is continuing with chains expanding their footprint in all regions. We see an in-sourcing of genetic services in the Middle East. I guess that's not surprising given the drop in IVF cycles that I have mentioned and clinics increasingly looking for sources of revenue. We're also seeing an increase in RFPs or tenders from clinic chains. This tends to favor the full portfolio larger players. So again, we see this as an advantage for the Vitrolife Group. And then finally, demand for automation is high, and it's increasing as clinics strive to improve their efficiency. Of course, this is one of the core pillars of the Vitrolife Group strategy to help clinics with automation.

Okay. Moving on then to competitors. In the market, there have been supply issues from competitors in parts of the consumables portfolio in particular, and we have taken advantage of this dynamic, capturing share. Interestingly, we're seeing an increased presence of low-cost genetic competitors in low-price regions. I think this is going to be an interesting one to watch because regulatory demands are going up. And I think grabbing share at low prices is going to be tough to maintain as the regulatory demands increase. We, as you know, at the Vitrolife Group, have a goal of driving sustainable, profitable growth. So we will not be engaging in low-price competitive tactics.

And then I think this is an interesting one to point out. Competitive activity is regionally based despite the fact that on paper, we face global players in terms of the competitive landscape. The Vitrolife Group is a true global player as evidenced from our regional revenue split. However, we don't face the same competitors across the key markets.

All right. We'll now move on, and I'll take you through some of the key highlights. Americas sales. So Americas sales increased by 11% and the strategic investments that we have made in North America are clearly paying off. So we're starting to see this quarter after quarter now. And if anything, the growth in North America is accelerating.

We're happy to see our gross margin back up at 59.9%. In fact, this is one of our strongest gross margin performances in a long time. We are becoming more sophisticated in terms of our ability to leverage the full portfolio in the key markets where we have decided to double down.

And then consumable sales increased by 9%. It was difficult to pick either consumables or technologies because technologies also had a very strong performance in the quarter. I think this consumables number clearly demonstrates that we are improving our competitive position globally. The technologies growth, by the way, for those of you who haven't seen the number yet, is plus 11%, as I said, organic growth in local currencies.

All right. Let's now move into the regions. And we will start with our largest region, which is EMEA, accounting for 38% of the global revenue of the Vitrolife Group. Sales of SEK 312 million in the quarter, a decline of 1% in local currencies. We had robust growth in Europe, offset by declines in cycle volumes in the Middle East. This has not lost share. It's cycle volumes. And as I said, Europe performing well. Sales in consumables were flat. The Middle East is impacting the region's performance as a whole.

Sales in Technologies decreased by 2% with very strong sales actually in Europe, both of capital and consumables and technologies, offset by a significant decline in capital sales in the Middle East. I would like to point out here that Europe is our most penetrated region for EmbryoScope, but clinics need for automation is driving demand. And I think what's particularly pleasing about the technologies numbers is the consumables revenue per EmbryoScope is accelerating nicely.

Sales in Genetics decreased by 2% due again to the situation in the Middle East. And of course, in this region, this is actually the region most impacted by the exit of certain tests in the genetic services portfolio. But I would say broadly across the region, strong performance in Europe, offset by decline in IVF cycles in the Middle East due to the situation there.

Okay. Let's move on now, and we will take a look at market region Americas. So as you all know, we made a strategic decision to invest in sales and marketing in North America, but particularly in the United States. And we are now delivering strong double-digit growth in the largest IVF market in the world in terms of revenue. Sales of SEK 264 million, an organic growth in local currencies of 11%. What I really like about the performance here is that it's strong across the entire portfolio. It's everywhere, so -- and well above the market growth rates.

Sales in consumables increased by 16%, and this is driven by share gains in high-volume centers. This has been one of the key growth drivers for us and an area where we have very much doubled down and brought in specialist talent to work with us in the large clinic chains.

Sales in technologies grew by 107% as we increased adoption of EmbryoScope in the large clinic chains. And sales in Genetics increased by 2% with a strong performance in North America, offset by a decline in low-priced markets in South America. So to conclude, very strong performance in Americas, driven by North America and on this occasion, particularly by the United States.

Okay. Finally, we move to APAC. So the APAC market, as you well know, has been turbulent for several quarters. So we are pleased to see some signs of recovery. We delivered sales of SEK 232 million in the quarter, an organic growth of 7%. I should also point out, as you can see here from the donut that APAC now accounts for 29% in terms of share of revenue.

Higher market growth than we've seen for several quarters, partially due to a low Q1 in 2025. Consumables grew by 15% with a strong performance across the portfolio in key markets. So what we're really starting to see now is that our ability to leverage the strong position that we have in media and other areas is serving us very well in terms of our ability to start accelerating growth across the other parts of the consumables portfolio.

Technology sales increased by 5% as we increased our EmbryoScope penetration. And in Genetics, sales declined by 6%, and this is primarily due to the timing of genomic kits orders from major clinic chains. This can have big swings from one quarter to the next. But I would say, again, to conclude here, overall, pleased to see APAC back in growth terms.

All right. I'm going to move on to my final slide before I hand you over to Par. As you know, we have a mission to be the leading global partner in reproductive health, striving for better outcomes for patients. Of course, we are executing on our quarters. But very importantly, we need to stay on track in terms of executing on our long-term strategy, helping us to become that leading global partner. And I'd like to give you an update in terms of how we are doing in relation to growth, innovation and operational excellence.

So when it comes to growth, we're driving profitable growth through improved market and customer segmentation. We've become much more sophisticated, strategic and I would say, premeditated in terms of which markets we're going to play in, which markets we're not going to play in, and same goes for customers. And this is all in the name of driving profitable growth.

We're gaining share by leveraging the full Vitrolife Group portfolio. We are a true end-to-end provider for large clinic chains. We have consumables, we have technologies, and of course, we have a full service in terms of genetics. And then we are accelerating penetration of our EmbryoScope and lab control solutions in clinic chains. And as I mentioned in my opening slide, demand for automation to improve clinic efficiency is high, and it's only increasing.

In terms of innovation, we have a strong pipeline of new products, of new tests and solutions that we are going to be bringing to market in the coming quarters. And we're very excited about this. Innovation is an area where we decided to double down over the past 2.5 years. We're also advancing the efficiency of the IVF clinic workflow through the use of AI and our iDAScore software in embryo selection.

And then when it comes to operational excellence, we are investing in IT and digital capabilities, as we've mentioned several times. This is to improve the customer journey, but also to improve connectivity with the large clinic chains. And this is where we're winning. You can see this from the results.

So that connectivity piece is very important. And then we are taking actions to optimize our cost base across operations and back office. And of course, you're very familiar with the restructuring program that we announced in December.

So with that, I'm going to hand you over to Par to take you through the financial highlights.

Thank you, Bronwyn. So some numbers. Our net sales ended up at SEK 807 million. It's in SEK, minus 4% growth, heavily impacted by negative currency as we have seen now for 4 quarters in a row. I will come back to that in the next slide.

Our gross margin ended up at SEK 483 million with a gross margin of 59.9%, which is one of the stronger we've seen for many quarters. And our EBITDA ended up at SEK 251 million and a margin of 31.1%. The increase in margin was driven by product and market mix, strong growth in consumables and strong growth in technologies, and strong growth in APAC. That's what I mean with the product and market mix.

So go back to the net sales then. We ended up at SEK 807 million. We had a 5% positive organic growth in local currencies, but with the current situation that started actually 12 months ago, we still see that. So a negative impact from currency of 9% on the top line, ending up in a SEK growth of minus 4%.

So on the gross margin, 59.9%. It's one of the strongest quarters in gross margin due to a strategic focus on key markets and product groups. We had strong sales in Technologies and Consumables, 2 product groups with high gross margin and also very strong sales in APAC with high gross margin. So this is behind the product and market mix comment.

If you look at the segment, Bronwyn already talked about the sales, but if we look at the gross income and gross margin, we see an improved gross margin in all regions, very positive, 56.1% in Americas compared to 53.7%, 61.7% in EMEA compared to 59.5% and 61.7% versus 58.4% last year. So strong good improvement in all regions in gross margin.

On the market contribution, 25.9% versus 25.3% in Americas, 38.8% versus 39.2% in EMEA and in APAC, 43.4% compared to 42.4%. So all in all, we had a slight improvement in market contribution, total 35.9% versus 35.6% last year, quarter 1.

If we look at then at the operational expense development in the last 5 quarters, we see a reduction versus the last 3 quarters, and it's flat versus Q1 last year. And I will come back on some details on that. The restructuring program that Bronwyn mentioned is on track. We don't have that much impact in Q1 when it comes to savings. The savings will kick in starting in Q2 and also Q3.

So on the details on the OpEx. It's flat compared to Q1 last year, but we see an increase in selling and marketing. That's related to the investment we've done in the Americas that Bronwyn explained. We also have a slight increase in admin, that is related to IT spendings.

And then the increase in R&D of SEK 6 million compared to Q1 last year is related to spending that have been allocated to support upcoming product releases and launches. So the increase from these 3 have been offset by positive currency revaluation effect that is booked in other income expense. So all in all, it's flat compared to last year.

Then on the cash flow, we usually comment upon the middle bar here, the cash flow from operating activities, which ended up at SEK 172 million. Last year, it was SEK 69 million. Of that cash, we have invested SEK 44 million in the ongoing investment in the new production facilities in Gothenburg, but also R&D investment in product development. And then of the remaining cash, we have reduced our loans by SEK 66 million, ended up at cash flow for the period of SEK 61 million.

And then to summarize then, the key financials, SEK 807 million, representing a 5% organic growth in local currencies. Strong gross margin, 59.9%, strong EBITDA margin, 31.1%. Our net income, SEK 101 million in line with last year. Earnings per share, SEK 0.74. And our cash flow that I just explained, SEK 172 million versus SEK 69 million last year. And our net debt to EBITDA, 0.6x, a slight improvement from last year. And then our proposed dividend is SEK 1.10 per share.

By that, we open up for Q&A.

[Operator Instructions] The next question comes from Ulrik Trattner from DNB Carnegie.

And my question would relate to the growth in North America and the strong development that we have seen there. And it looks like you're continuing to grab market share and you talked about it. But is it possible to quantify how much of the growth here is coming from normalized market versus market share gains?

And especially also if we can get some nuances on from whom you're grabbing this market share. My impression is that both Irvine and Kitasato are relatively aggressive in the marketing in the region. Would you say that the share base is broad-based from all your competitors? Or is this from single source?

And as well as a follow-up would be, how important is your Denver facility in order to sort of grab the market share versus your competitors that are predominantly outside of the U.S. in production?

Okay. I think that's three questions in one, but I'm more than happy to answer them all, Ulrik. So actually, I'm going to start with the final part.

So we do have a facility in Denver, as you rightly pointed out, we have manufacturing, but we also have our [indiscernible] there, as you know. We also have a laboratory in Miami and customer service there, and then we have manufacturing in San Diego. So we have a, sort of a, strong footprint in terms of, let's just say, what would be expected.

Who are we taking share from? It's always very difficult to say because in the IVF market, unfortunately, unlike other areas of health care like orthopedics or cardiology, you don't have independently published data confirming the competitive position of each of the players. But -- and equally, we report Americas together. But I can tell you, if we look at our North America growth broken out, it is significantly above slightly growth in the region.

There's a lot of distraction factor going on in the market, Ulrik. You have -- well, the largest competitor has its own challenges with the strategic review. And I guess that sort of plays to our advantage. And then you have players 3, 4 and 5 consolidating into a new company. So what I say to the team, Ulrik, is don't get distracted, keep our heads down. We have a fantastic end-to-end high-quality portfolio. We've invested in the region in a really, really strong team. Just don't get distracted, keep your eyes on the prize and drive share gains.

I think the other thing that's really helped us is we are targeting the large clinic chains. And they are demanding high quality, but they are also increasingly looking for automation. So the combination of EmbryoScope and the efficiency that, that brings, you can see EmbryoScope up 107%. It's not insignificant. But the sort of -- the combination of EmbryoScope, then the high-quality Consumables portfolio.

And then we're one of the market leaders when it comes to Genetic services. So we're really leveraging the full portfolio. And this is a guesstimate, but I think it's broad share gain from multiple players. But the distraction factor, of course, helps.

So I've answered the manufacturing footprint, I've answered the share. And hopefully, I've answered that it is well above the market growth rates without the exact percentage. But [indiscernible] we obviously don't give you the breakdown. You see it by Genetics, by Consumables and by Technologies. But what I can tell you is it is across the entire portfolio. It's everywhere, which is really nice and a healthy thing to see.

Okay. Great, Bronwyn. Just a quick follow-up. As you mentioned, more consolidation and higher sort of tender activity. Is that something that is purely favoring you? Or are you seeing price pressure as well on the back of that?

Yes. Right now, it's favoring us because the large clinic chains tend to want to deal with one supplier with a potential backup. They don't want to have to deal and contract with multiple players. I would say maybe slightly more price pressure on the Genetics side, not so much across the rest of the portfolio. But again, I guess the thing, of course, with Genetic services is people tend to want to go with very high trust players. And that doesn't necessarily mean that they're as cost sensitive as one would expect.

So I would say we're not experiencing high cost pressure in the market. And typically, the larger tenders are something that favors the larger players, us being one of them. And yes, so I would say right now, it's a tailwind, not a headwind.

The next question comes from Jakob Lembke from SEB.

A question on APAC. Quite positive development here in the quarter, and you sound a bit more positive on the market growth, I would say, but you also highlight, sort of, that Q1 last year was exceptionally weak. So I guess my question then is, when you look forward, do you see APAC, sort of, getting back to -- yes, maybe back to sort of low to mid-single-digit growth again, looking forward?

Yes, it's a really good question, Jakob. It's quite a mixed bag in APAC. So happy to see the growth. But yes, as you correctly said, Q1 was very low. I think there are some green shoots, but I wouldn't be getting too excited. It's very much regionally based. What we are seeing, and I got this question this morning from industry is governments across the world, and we see it here in Sweden, are really starting to improve the support for people not just to -- not just the IVF costs, but also the cost of raising a child. So I think over the longer horizon, we would have to believe that these measures will start to kick in.

But I would -- I think I would be cautiously optimistic, Jakob, on APAC. It's been turbulent for quite a while. Yes, it's a good quarter, and we managed to do particularly well. But I would like to see some sustained quarters of recovery before I could conclusively say that it's returning to the type of numbers that you mentioned. So in summary...

Okay. Great. Then just a follow-up then regarding the gross margin, which I believe is strong here in the quarter compared to recent quarter. And as you said, I know it's very mix sensitive. But I guess if we say that the mix on regions and products stay the same, should we expect sort of the same gross margin? I have a follow-up.

Yes. I mean it's -- as I said, it's a product and market mix where consumables, which is a high gross margin product group is growing well and technologies as well, and less growth in Genetics, which is the lower gross margin product group.

Yes, I think this mix we have right now is -- it's not a onetime off mix. I think we can expect similar mix going forward. Maybe not to that extent, but leading towards this mix that we saw now.

And it's not -- and I think we would like to communicate, it's not a coincidence. I mean, we are aiming towards growing in the more profitable areas, in the more profitable countries. And we are also, as communicated in December, we are leaving some product lines that are not so profitable and leaving some low-margin small countries. So these are, of course, helping us. And we haven't seen the full effect of this. It started to kick in a little bit in the end of quarter 1, but more will come -- the full effect we will see in Q2 and onwards. So that will help us even further on the gross margin a little bit.

The next question comes from Ludvig Lundgren from Nordea.

So I wanted to start out on your current view of the IVF market. You sounded quite optimistic regarding cycle growth coming back to mid-single digits for '26 in the Q4 report. So has your view -- market view changed in any way since then?

Yes. I mean we -- it's exactly as I said at the start, there are regional differences for sure, but Europe is stable, which is good. Our largest region U.S. and North America, as we know, was very rocky last year for all of the reasons that we know. It did start slow, but it's improving, which is good.

So Middle East is a disappointment, but what can we do? I mean you can only control the controllables. APAC, to the point we've just discussed there with Jakob's question, I mean, APAC is a mixed bag, but key markets there make a very big difference.

So I think if we -- very hard to say if only, but if everything had been normal in the Middle East, I think we would -- yes, we would have been back in that sort of range. But of course, it isn't. We're all hoping for peace and the sooner that happens, the better.

But certainly, things are a lot more stable than they were last year, and that's good. So yes, it's been very, very difficult to predict, but we are starting to see -- I think the words that they use on the other side of the pond is normalcy. We're starting to see more normal cycle levels, which is good. I'm not -- with the Middle East piece, I don't believe we're back up to mid-single digits. We're not there yet with that situation, but healthier signs in most of the regions, which is good.

Okay. Very clear. And then a bit of a follow-up on the gross margin side. So you mentioned mix affecting mainly APAC and Americas. But in EMEA, it seems that the mix was somewhat similar to Q1 last year. So what explains this, I think, 2% gross margin increase year-over-year in EMEA isolated?

Yes, I can have a go at that, Par. So Technologies and Consumables did very well in Europe, in this quarter. Unfortunately, that performance was offset by the situation in the Middle East, but the higher-margin parts of the portfolio are performing well in Europe. And as Par mentioned, Genetic Services is lower margin. So the growth being down doesn't -- yes, it positively affects the mix.

I don't know, Par, have you got a better way of explaining that?

No, that's it.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

So I want to ask you about the supply issues you mentioned for one of your competitors. If you could perhaps talk about what kind of products is related here? And also how much of the 9% growth you had in the quarter is sort of related to that, if that would be possible to break out?

Yes. So Sten, thank you for the question. So this particular competitor has had supply issues, but also recalls and legal challenges. So this has been ongoing for quite a while. So you have a little bit of a compounding impact here, Sten, in terms of -- as I've stated in previous earnings calls, we have captured media share. We've been capturing it for a while. But with that full portfolio play and us becoming much more targeted in terms of the markets where we're playing in, where the ability to leverage the full portfolio and pull-through across the rest is leading to share gains in other areas outside of media. And then our Consumables growth is well above market growth.

The exact split is very, very difficult to quantify. Unfortunately, I'm not being evasive. I just don't have objective data to be able to commit to a number on that. But -- I mean, consumables in North America grew 16% in the quarter. That is significantly above the cycle growth in North America this quarter. So -- but it has been compounding, Sten. So it's supply issues, it's recall, it's distraction. Yes, it's multiple factors. Yes.

All right. And if I may, a follow-up on the gross margin, just so I understand correctly. So there are no, sort of, incremental improvements on your actual products. It's all related to the mix, which we should assume to sort of continue with your ambition to grow in more profitable areas, both from a geographical and product mix?

Yes. We did -- during last year, we did increase prices in our regions, which, of course, has an impact still in -- compared to last year then. That is, of course, contributing. But there is no specific action on a specific product group this quarter that it's more the mix.

The focus on the regions, the profitable regions and the profitable product lines that explains the improvement in the gross margin. But there is, of course, a price effect there as well coming from last year price increases. For example, we increased prices by 6% in U.S. last year, in the immediate last year. I think that is still -- have an impact when you compare to last year.

And we have to carry the cost of tariffs as well, Sten, don't forget that. So we have the tariff piece. Sometimes I think people forget MedTech, we have tariffs. Pharma doesn't. So I mean, we have to pass those prices on to customers. So -- and we did, and we did it quickly, and it helped to insulate us from the tariff effect. So I wouldn't say -- it's not by accident. We took measures and we executed on them quickly to protect.

The next question comes from Filip Einarsson from Redeye.

My question is sort of the topic of innovation, which you mentioned in the report that you're planning to release new products, that you're bringing to market. Maybe you could elaborate a little bit on what sort of product this is, and also how impactful you expect them to be over, let's say, the coming year or 2 on the P&L?

Yes. So I would love to tell you that, but I'm not going to tell our competitors who are listening in. What I will tell you is that we have launches coming in all parts of the portfolio. So we have launches coming in Consumables. We have launches coming in Technologies, and we also have launches coming in -- on the Genetic services side.

And Vitrolife has a wonderful history of doing M&A, but I think in-house innovation has been an area for improvement. And we really, really took a strategic decision to double down here a couple of years ago and not throw paint at a wall and try to innovate everything, but to pick the key areas that will move the needle and be impactful for clinics and for patients. And I think what's going to come this year is the results of that R&D prioritization.

But I don't know if you're planning to go to ESHRE. If you are, hopefully, you should see some exciting new things there from the Vitrolife Group. But it's coming. And then in terms of impact on -- in terms of impact -- yes, I mean, a couple of the launches, one of the launches in particular, towards the back end of this year could be quite meaningful. And equally, I would say there will be a launch probably coming out back end of this year or early next year, which we also expect to be very meaningful. So I would say two meaningful, impactful ones coming and others more, I guess, what I would call it innovation. So yes, yes.

Okay. That's helpful. And with all respect, of course, you don't want to disclose too much, but maybe you could help us understand if it's more of, let's say, a new product service or is it more add-ons to existing products and services?

Yes. So it's both. It's some new products. It's other areas where we haven't had an offering before. Others are improvements on what we already have. And then we also have some breakthroughs coming where we would be first to market with a particular technology. So a sliding scale of exciting things to come, Filip.

The next question comes from Filip Wiberg from Pareto Securities.

I had a question on Technologies, which was quite strong in the Americas. So Q1 is normally on the weaker side seasonally. So I'm just trying to get a better sense of the drivers here. So first, if there were any orders pushed from [indiscernible] to Q1, for instance? And also like what kind of visibility you have going forward now in that area?

Very high visibility. We are tracking the funnel on a weekly basis. So we are intensely tracking the funnel for EmbryoScopes for the Consumable revenue of EmbryoScopes, for the Services revenue and for the pull-through. We have built a commercial excellence engine with best-in-class industry talent. So I can tell you we are very closely monitoring this.

It's not spillover orders that didn't come in, in Q4 and came in, in Q1. Really, what this comes down to is breakthrough in acceptance of EmbryoScope in the clinic chains. That's what it is. And that's been more difficult for us. I mean, I think historically, Vitrolife Group has been better at selling EmbryoScopes to mom-and-pop smaller clinics. But now with the chains needing to drive efficiency and reduce costs, they really see and appreciate the advantages that EmbryoScope can bring.

So while it takes a lot longer to negotiate the purchase of larger numbers of EmbryoScopes, it's also the time from lead to close is a lot longer. But when the deals come over the line, they are larger. And that's -- yes, in the case of Q1, that was a big needle mover. But we have very high visibility on the EmbryoScope funnel and utilization and consumable revenue per EmbryoScope, yes.

Okay. Very happy with that answer. So second one on the Middle East situation and obviously, always very difficult to answer. But like the cycle impact, is that mostly about people delaying starting treatment? Or have you seen any disruptions to your operations as well?

And then just -- like I know it's very uncertain, but do you expect any long-standing consequences from this like we see with the in-sourcing of genetic services or maybe more return to normal once the situation de-escalates?

Yes. So it's mainly, as you rightly pointed out, Filip, it's mainly people delaying their IVF cycle. So activity is way down in the clinics. And it's everywhere because sometimes people tend to think it's just Iran, Israel, it's across the Gulf -- it's across the Gulf states. So it is -- the impact is pretty far reaching.

I think this is going to take time to return to normal because -- from when a couple -- and in the Middle East, it's usually a couple, it's not individuals going. So when -- from when a couple starts on the IVF journey, it takes a couple of months before they're ready, and before you start actually coming into the clinic for retrievals and transfers and all of that. So our expectation is it's going to -- even if we have peace next week, it's going to take time for the Middle East to recover from this.

In terms of disruption to our operations, yes, we do have some disruption to our operations. We have a Genetic services laboratory in Dubai. So activity is obviously way down. And in terms of ability to ship to the region, that's also impacted. We have up to now find ways -- found ways of getting around that. But yes, the entire region is impacted. So volumes are down, cycles are down in the clinics. We've been managing the disruption, but we haven't been unaffected.

Maybe the other thing I don't want to sound too negative, but capital sales are way down in the Middle East. So our EMEA region, Technology did very well in Western Europe, but capital sales are way down in Middle East, which I guess isn't surprising given the situation. So yes, we think it's going to take a while for this to recover, yes.

The next question comes from Jakob Lembke from SEB.

Yes. I have some further follow-ups and I'll start with a question on the U.S. If we look from the market perspective, I would assume that Q2 last year was the weakest quarter. And I guess also Q3 was a quite weak quarter. So with that in mind, should we sort of see potential for even better growth in that region here in the coming quarters?

Yes. So the start of Q2 wasn't so badly impacted last year, Jakob, the latter half of the quarter was. So the quarter that where we really saw the most impact was Q3.

Can we accelerate faster? I mean, that's always going to be the goal, right? But we have to say Q1 was very, very strong across the board. The goal is always going to be to maintain that. But I don't think we will see a big bump from the comps in Q2. I think where we would expect it would be more around Q3, Jakob. But it's a good point that you raised in terms of the phasing and the comps from last year, yes.

Okay. That's clear. And then a more general question on Consumables. I'm wondering if there was any like large orders or something in the quarter that we should not expect maybe in the coming quarters?

Were there large orders? Yes. There were some large orders in South America. So we're starting to perform well in Consumables in LatAm, in South America. But the rest of the regions, it's pretty much steady as she goes. There's not -- there are no big outliers that I would call out, yes.

Okay. And then I also have a question on the IT projects you're running. I'm wondering if there would be any sort of, I guess, large investments sort of, I don't know, that makes individual quarters sort of deviate? Or should we expect sort of the current investment level to be sort of a run rate for the coming quarters?

Yes. I think the current level is what you should expect until further notice. I mean there will be perhaps in the future, a need for bigger investments in IT. But for the time being, there are no such decisions. So you can expect the present levels going forward.

Okay. Great. And maybe just one final, and that is another question on the Middle East. If it's possible in sort of any way to quantify the effect it had in the quarter, let's say, if it had a 1 percentage point impact to organic growth for example?

I don't think we can quantify that, can we?

Yes, we don't communicate that. We don't post that information.

Yes.

But we did have -- I mean, you saw the EMEA, it's a net effect of the Middle East and Western Europe. And as Bronwyn said, strong growth in Western Europe, offset by the negative growth in Middle East. But we don't disclose the specific impact.

Yes. I [indiscernible] basis, Jakob, but we don't disclose that, but I wouldn't underestimate the magnitude of the drop in the Middle East. It's very significant. It's in teens. Couples are not going forward for IVF in this environment. So it's way down. Down enough that in Vitrolife Group has pulled down the performance of our largest region. So we are severely impacted by this. I mean we are, but there's no doubt about it, yes. That's why we're happy with our 5% organic growth in local currencies because we've managed to deliver it while navigating the Middle East situation.

Next question comes from Ulrik Trattner from DNB Carnegie.

And one question regarding product launches. And I know that you don't want to give up too much information to your competitors. But if we can just phrase it like this. Your embryo transfer catheter gained 510(k) approval mid-year last year. Is that a commercial product now? Or is it still sort of in preparation?

Yes. So you're smart, Ulrik. I always underestimate you. Yes, that's going to be one of the ones that's coming for sure, the ETC. And of course, what's very compelling in our case is we also have EmbryoGlue, right? So we have the ETC with the EmbryoGlue, which is a very nice and compelling value proposition for customers. So yes, that's going to be coming out of the gates.

All right. So it's a coming product launch. Great. And second question would potentially be more addressed to you, Par. It sounds like you're doing a traditional tail cutting as you're focusing on higher-margin products, higher-margin markets that suggests low-hanging fruits. How much of the portfolio are you currently reviewing and assessing beyond sort of what's been announced regarding the Genetic strategic review?

Yes. No, it's an ongoing process. I mean that what we communicated in December is the lowest hanging fruit. There are more fruits hanging low. So we will continue to do this, and we are working. It's a combination of focusing on this, but also developing tools and measures how to measure profitability on customer level or product line level and so on. So it's an ongoing process. And yes, we will do more.

Is it possible in -- is it possible to in any way quantify how much of total sort of top line sales would be assessed? Or is it just sort of a review of everything all the time?

Yes. We don't disclose that information, but we assess everything in all product groups in all regions, yes.

Okay. That's great. And then last question on my end. We're now approaching sort of the 1-year mark of the class action lawsuit being filed on your end. And we have seen the dismissal from your competitors here in the last half a year. So what -- can you provide us with any update on the matter?

Yes. So well, how long is the piece of string is unfortunately how these things go. But we see it as a positive sign that there have been other dismissals in this area. And also the case against Vitrolife was -- I'm not quite sure the exact legal language, but it wouldn't have been as strong as compelling as it was against some of the other competitors, but you never quite know. But we're feeling more comfortable around this one in the U.S.

Not to go too technical, but we also have certain clauses in our contracts, which provide additional safety for us in these types of instances. So we don't -- let's just put it this way, we don't see any dis-improvement or need for increased concern around these cases in the United States. In fact, we see it the opposite way, so.

And it's a very long process as well, and we haven't received any major updates on that in the last couple of months here. So it takes time. But, yes.

That's great. And is it possible to, in any way, quantify how much sort of the lawsuits, or sort of legal processes have caused in terms of cost beyond sort of your insurances, et cetera?

Yes. It's not that much. I mean we have not accrued anything when it comes to potential gains, because we don't believe in that. But that will happen. But we have accrued and we have had cost for the legal support, and that is a couple of million SEK so far.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

Yes. A very quick follow-up on the Middle East situation. Could you -- and I understand you don't want to give us the exact details on how much it has declined. But could you share with us sort of on a normalized level, how much of your sales comes from the Middle East in a normal year or normal quarter?

We don't give the exact percentage, Sten, but I can tell you it's in the single digits.

Of global or of EMEA?

So global in a normal quarter.

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

So thank you very much for joining us overnight from Sunny Stockholm. Thank you.

Thank you very much.

Welcome to Vitrolife Q4 2025 Earnings Call. [Operator Instructions]

Now, I will hand the conference over to CEO, Bronwyn Brophy, and Par Ihrskog. Please go ahead.

Good morning, everyone, and welcome to the Vitrolife Group Q4 report. I'll now move you through the first slide of the presentation. Let me start with the highlights. We delivered 6% organic growth in local currency, excluding discontinued business, beating our own internal forecast for the quarter in relation to the top line. Strong growth in Americas, again, driven by North America. I should also call out that APAC also performed very well in the quarter with 10% organic growth in local currency. And the third point that I would like to highlight is that following a strategic review of our Genetic Services business, we announced a restructuring program in December. This will allow us to focus on the key tests and markets with stronger prospects for profitable growth.

I'll now move on to the next slide, please, and take you through the key highlights. So sales in the fourth quarter were SEK 891 million, an organic growth in local currencies of 6%, as I mentioned, but significantly impacted by minus 10% from currency effects. Gross margin was 58.6% when adjusted for the restructuring. This was a decrease versus Q4 2024, which was exceptionally strong. Additional factors impacting the gross margin are: a currency impact, which is the majority impact; the regional mix. As you will see in the coming slides, we are increasingly having a greater percentage of our revenue coming from Americas. And then, we also have a mix effect within Consumables in APAC, where we had a targeted campaign in disposable devices.

Moving down then to EBITDA. We had EBITDA of SEK 251 million in the quarter, equating to an EBITDA margin of 28.2%. We also have a significant negative currency impact here just under 3%. Regional mix and product mix, as I mentioned also in relation to margin, is playing a role. And we do have higher OpEx here due to strategic investments that we made in sales and marketing in North America -- of course, that also helped us to drive the growth there -- and also in IT, where we have made investments to support our customer journey and also enabling us to drive growth in North America.

I'd like then to comment on the operating cash flow, SEK 160 million. Clearly, here, the starting point is lower for the reasons that I have just explained. Last year, we also had a positive effect from changes in net working capital.

Then, for the full year, we had organic growth in local currencies, excluding discontinued business, of 4%. And actually, Par in his final slide of the financial section will take you through the full year numbers in detail.

Okay. Moving on then, please, to the sales and growth per geographical segment. So I'll start with Americas, where, as I said, we delivered 9% organic growth in local currency, driven by a very strong performance in our key focus market of North America. Americas, as you can now see, accounts for 34% of our revenue.

Moving on then to EMEA, a challenging quarter for our EMEA region as we expected due to very high Technologies quarter across the region in Q4 2024. I do want to highlight that Europe is performing well. However, Genetic Services in the Middle East is impacting the overall EMEA results. A great quarter in Consumables across the region with share gains in key focus markets. EMEA now accounting, as you can see there, for 34% of the share of total sales.

Okay. Moving on then to APAC. We had strong growth in APAC, up 10% organic growth in local currencies, and this region outperformed our internal expectations in both Consumables and Technologies.

Okay. We'll move on now and take a deeper dive into each of the regions, starting with market region EMEA. Sales in EMEA were SEK 333 million, a decrease of minus 1% in local currencies, excluding discontinued business. Consumables delivered 11% growth, well above market growth level, and this was driven by share gains in key focus markets where we decided to double down. So you're really going to see that focus is the name of the game for us. As I previously mentioned, we were very challenged to deliver growth in Technologies in this region due to the comps with last year. So this decline was forecasted as expected. What I am pleased with is the run rate revenue coming from the consumables part of Technologies is performing strongly.

Moving into Genetics then in the EMEA region. Genetics is performing very well in Europe. However, clinics in the Middle East have in-sourced activities to boost their income during the downturn from the geopolitical situation, and we don't expect this business to return. Typically in clinics in-source, it tends to stay that way.

Moving on then to market region Americas. Americas, we have sales of SEK 299 million in Americas and organic growth of 9% in local currency. We delivered strong growth across the entire portfolio in all markets in the region, which was great to see. The investments we have made in sales and marketing in North America are clearly paying off, and there is no doubt that we are taking share in this key region for the Vitrolife Group. We have been focusing the team on increasing the penetration of EmbryoScope, and we were delighted to see a 40% growth in Technologies in this region in the quarter. Genetics also continued to perform well, driven by share gain momentum. Earlier in the year, we have taken quite a bit of share in North America, and that share gain momentum continued in Q4.

Okay. I will now move you on to market region APAC and give you some more color on the performance here. So a strong finish to the year in our APAC region, growth of 11% in local currencies in Consumables, driven by share gains in disposable devices where we launched a targeted campaign. We delivered 13% growth in Technologies as clinics finally released year-end budget, thereby allowing for investments in capital purchases. So overall, a strong finish to the year after a tough first half in APAC.

I will now hand you over to Par, who will take you through further details on our geographical segments.

Thank you, Bronwyn. We are now on Page #9 in the deck, where I will provide more details of the geographical segments, Americas, EMEA and APAC, starting with the Americas on the left side. As Bronwyn mentioned, sales amounted to SEK 299 million, reflecting a 9% organic growth in local currencies and a minus 4% growth in SEK, negatively impacted by currency.

Gross income amounted to SEK 167 million with a gross margin of 55.7%. This compares to last year's gross income of SEK 171 million and a margin of 55.0%, an improvement of 0.5 percent points, driven by the product mix despite negatively impacted by the FX effect on the gross margin.

Selling expenses for the quarter rose from SEK 76 million to SEK 83 million, reflecting the ongoing investment in sales and marketing in the U.S. as previously announced. The market contribution for the quarter was 27.9% compared to 30.5% last year, impacted by the increased strategic investment into sales and marketing capabilities.

Let's move on to EMEA. There, we had a minus 7% decrease in local currencies and minus 13% in SEK, totaling to SEK 333 million sales. The sales were negatively impacted by currencies and the discontinued business. Excluding the discontinued business, sales decreased by minus 1% in local currencies.

Gross income was SEK 195 million with a gross margin of 58.5% compared to SEK 245 million and a margin of 63.9% last year, mainly driven by the restructuring reserve, negative currency and product mix effects. The gross margin excluding the restructuring was 60.2%. Selling expenses increased from SEK 82 million to SEK 100 million. Excluding the restructuring costs, the selling expense amounted to SEK 79 million, which is in line with last year level. The market contribution margin for the quarter was 28.4% compared to 42.4%, explained by restructuring reserve and product mix. The adjusted market contribution was 36.4%.

In APAC, sales amounted to SEK 259 million, reflecting an increase by 10% organic growth in local currencies but a 2% decrease in SEK, negatively impacted by currency. Gross income was SEK 155 million with a gross margin of 59.9%, which is lower than previous year's gross income of SEK 170 million and a gross margin of 64.2%, a decline of 4.3 percent points compared to previous quarters, negatively impacted by currency and product mix within the Consumables in APAC.

Selling expenses increased from SEK 40 million to SEK 45 million. The market contribution margin for the quarter was 42.5%, down from 49.1% last year, explained by lower gross margin and somewhat higher OpEx in the quarter.

Let's move to the next slide. On this slide, I will comment on the Q4 financial highlights, starting with net sales. As earlier mentioned, the sales amounted to SEK 891 million compared to previous year with a sales of SEK 959 million, corresponding to a 3% growth in local currencies, a minus 7% decrease in SEK and positive growth of 6% in local currencies, excluding discontinued business.

The gross margin income amounted to SEK 522 million compared to SEK 586 million previous year, corresponding to a gross margin of 58.0%, down from 61.1%. Q4 2024 was an exceptional strong quarter from a margin perspective. Adjusted for the restructuring, the margin in Q4 this year was 58.6%, which is more in line with our historical performance. The drop in the margin is explained by mainly currency effect, but also regional mix effect and also the mix effect coming from the Consumables in APAC.

And then, I'll move to EBITDA. EBITDA -- all in all, this gives us an adjusted EBITDA of SEK 251 million compared to SEK 337 million previous year. As I just mentioned, this was an exceptionally strong quarter last year. This gives us an EBITDA margin of 28.2% when adjusting for restructuring expenses compared to 35.1% last year. The drop in margin is explained by currency effects, regional mix effect and mix effect within the Consumables in APAC.

Okay. Let's move to the next slide where I will go more into detail on the operating expense development last year compared to this year. So last year, we had an OpEx of SEK 361 million, and this year, we ended up at SEK 378 million. And let me explain the bridge here. On the selling expense, we saw an increase. This is excluding impairment and restructuring reserves. So this is clean from those onetime bookings. So the selling expense increased by SEK 6 million, reflecting the investments we have done in North America in sales and marketing. The admin expense, we saw a reduction of SEK 2 million versus Q4 last year. We still have some increased IT expenses here, but that has been offset by a reduction in other admin areas, so a positive net effect.

On the R&D, we saw an increase of SEK 5 million in the quarter compared to last year, which is mainly a phasing effect. And the spending here is in line with our efforts to increase our R&D expenses in preparation of new product launches. And on the other operating expenses, in this one, we also have the FX effect from our revaluation of accounts receivables and accounts payable, had a negative effect in total.

Okay. And then, key financials. Here, I will focus on the year-to-date column mainly. And the sales then for the full year amounted to SEK 3.5 billion, corresponding to a 2% growth in local currencies, a 5% decrease in SEK and a 4% increase in local currencies, excluding discontinued business. The gross margin decreased from 59.3% to 58.1%, mainly due to currency effects. The adjusted gross margin is 58.2%.

The EBITDA for the full year amounted to SEK 949 million compared to SEK 1,225 million corresponding to an EBITDA margin of 27.6% versus 34.0% previous year. The adjusted EBITDA margin was 29.2% for the full year. And again, the decrease in the margin is heavily impacted by currency effect, driven by the strengthened SEK against other currencies. The margin was also negatively affected by the increase on OpEx, which I explained is mainly selling expenses in North America and our IT investments.

Net income amounted to SEK 390 million compared to SEK 514 million previous year, heavily impacted by the currency fluctuations. This gives an earnings per share of SEK 2.89 compared to SEK 3.78 last year.

On the operating cash flow, it amounted to SEK 635 million for the full year compared to SEK 907 million previous year. The main reason is the underlying result, but also we had a negative impact on the changes in net working capital this year, explaining part of the difference. Our leverage net debt to EBITDA ended up at 0.7 compared to 0.7 previous year. The proposed dividend from the Board is SEK 1.10 per share, which is the same as last year.

And I will now hand over back to you again, Bronwyn.

Thank you, Par. So moving on then to the focus for 2026. And as always, we will focus on 3 key areas: on growth, on innovation and on operational excellence. And I'd like to start with growth. We will continue to drive share gains in key markets, and that's very important. We're not going to be all things to all people in key markets, leveraging the full breadth of the portfolio. I think one of the statistics that we've been tracking very closely is the percentage of customers who are now buying across Consumables, Technologies and Genetic Services, and this is trending up nicely. So the strategy of leveraging the full breadth is working, and we'll continue to drive share gains using our portfolio position.

The second point on growth is accelerated penetration of our combined EmbryoScope and lab control solutions. We've really doubled down here. That's why we're particularly happy with the 40% growth in North America in Q4, and it's really as a result of this EmbryoScope -- combined EmbryoScope and lab control solutions. Third point, very important, we have been investing in commercial excellence capabilities for the past 12 months. It improves our segmentation that helps us to drive profitable growth. And back to the point around taking market share, we've been tracking this very closely now with much more advanced metrics than we had previously. So we will further leverage the commercial excellence capabilities in 2026, again, to drive that profitable growth.

Moving on then to innovation. We have prioritized the programs that will have the greatest impact and relevance for customers and patients. I think that's very important. And then, we do hear clinics and customers calling out for help with automation. So we will further develop and we continue to invest in our IVF platform. This will ultimately help clinics to automate, to scale and to drive efficiency. And actually, if you look at the integration that we now have between EmbryoScope and our witnessing solution, you can see the foray that we are making in that area.

In relation to operational excellence, we have invested in IT and digital capabilities. We need to make further investments there to improve the customer journey. This has really also helped us in North America last year and then some of the key focus markets in APAC and Europe, and it also helps to increase our efficiency. And another focus area in relation to operational excellence heading into 2026 is, we want to drive improvements in our internal processes and workflows to optimize our cost base.

And then, as you know, the Vitrolife Group doesn't like to issue guidance, but we just wanted to give an opinion on the macroeconomic conditions as we turn the corner and are now into 2026. We do expect market conditions to return to more normal levels this year, thereby providing greater opportunities for us to drive profitable growth. So this will be the focus for the company in 2026.

And with that, I think we can now move into Q&A. Thank you very much for your attention.

[Operator Instructions] The next question comes from Jakob Lembke from SEB.

My first question is on the gross margin. You mentioned regional mix here during the call. I just want to clarify that is this mainly related to the sort of different business mix you have in the regions? Or are there anything else behind that in the regional mix? And then, also if you could sort of give an indication of sort of a 58%, 59% gross margin is a new normal we should expect going forward?

Yes. On the gross margin, as we explained, it's a big impact from currency, but also partly it's regional mix. It's less impact on -- it's a negative impact, but it's less impact compared to the currency impact, and it's very much driven by the growth in U.S.

Yes. And what was the second part of your question?

No, given the moving parts, I guess, a range between sort of 58% and 59% on the gross margin is something we should expect going forward?

Yes, I can take that one. And maybe just to add one point to Par's point. Just on the gross margin, Jacob, because I know you know us very well, so there is a regional mix effect. Par is spot on there with the U.S. growth. I guess, everybody knows that one. There is also a mix effect within Consumables in APAC. So you can see that there.

In terms of what you can expect going forward, I mean, Q4 last year wasn't normal. It was abnormally good. I think we will return to more normal levels, more in the sort of 59% range. We're not expecting the mix effect to be this extreme as we move through 2026. We're also working on initiatives to improve our profitability in North America. As you know, North America has a big component of Genetic Services. But obviously, the more we can increase Technologies' penetration, EmbryoScope and share gains on Consumables side, that helps. So yes, I guess, this quarter, we're sort of comparing 2 extremes, if you like, but we expect to return to more normal gross margin levels in 2026. Does that help to answer your question without reading too much? Is that okay, Jakob?

Yes, that's very clear. Then my follow-up question is just on trying to understand the admin costs here in Q4 because, I mean, you had sort of surprise high admin costs in Q4 last year, and now, they're also looking quite high when we disregard the one-offs as well? And yes, sort of just what is really behind that? And also, what do you expect for costs related to the legal process in the U.S. for 2026?

Yes. On the admin cost, in there, we have IT and then we have other support functions like finance and HR and legal. And IT spend, as we have communicated also previous quarters, have increased somewhat to -- as we invest in our IT capabilities. That increase in IT that we've seen in the last couple of quarters, in Q4, it has been partly offset by reduced admin costs in other areas such as finance, legal and HR. Yes, so this level you see right now is the underlying base. We have also communicated in December a restructuring program where some -- where we are attacking or looking at reducing admin cost and selling costs in 2026.

Okay. And if you could comment on expectations on legal costs maybe for '26 versus 2025.

We have not made any reservation for legal costs related to the transaction in U.S., and we don't plan to either. We don't see the need for that.

The next question comes from Ulrik Trattner from DNB Carnegie.

A little bit sort of -- if we can dig a little bit deeper into this IT investment you're doing. If you can provide us with some more specific on what it actually is? How big are these investments? And for how long do you expect to invest into essentially the back end of your business?

I can take this one, Par. Yes. So I guess, IT investment is going into 2 key areas, Ulrik. The first part is on the customer-facing, customer journey, digitalizing how we interact with clinics, but also with patients. And this is a key enabler of driving growth, particularly in North America, but also increasingly in Western Europe. So I would say that's category one. We're also making investments in IT that will allow us in time, and it will take time, to improve our efficiencies. So, that can be efficiency in lab operations, things like [indiscernible]. Obviously, when you're running a services business, you want to have -- you don't have to have the best of every system, but you want to be able to drive efficiency and also scale.

So apart from the customer journey, the other investments are going into, I guess, what I would call backbone investments. Now, again, we have to be pragmatic here. They need to be linked to driving growth. And we're not expecting to be best-in-class in everything related to IT, but we do believe there is a need to make investments in order to support our growth ambitions. Does that answer your question, Ulrik?

Sure. Yes. And just to clarify, so it sounds like there's not IT investment into products. It's more customer -- like more on sales and marketing kind of IT infrastructure rather than IT investment into products.

Yes. I think that's a fair comment. Yes. I mean, we are -- as part of our R&D program, as you know, we've openly stated that we are aiming to build an end-to-end IVF platform. So there are some digital investments there, but the vast majority are going on the customer sales and marketing drive growth side, either drive growth or help us to improve efficiency. So yes, you're correct with that assumption.

Great. And just a follow-up question on the general OpEx math and quantification of FX effect on EBITDA. If you were able to give us some hint on the quantification of the negative FX effects here for Q4? We know the top line effect here, but how big was the effect on EBITDA?

Yes. All in all, the FX effect on EBITDA margin is approximately 2.5 percent points affecting the EBITDA margin negatively.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

First of all, a clarification there or maybe confirmation. Did you say that the adjusted contribution margin for the EMEA region was 36.4% in the quarter?

[indiscernible] adjusted margin? Can you repeat the question, Sten? Can you repeat the question, Sten? You just went [indiscernible] for a moment.

Sure. I think you mentioned the adjusted contribution margin in the EMEA region.

Yes, it is -- the adjusted one is 36.4%.

Okay. Great. So my question is, what exactly are you restructuring in the EMEA region? And how should we think about sort of -- will there be savings coming out of that? Or what exactly have you done in the region?

Yes. I mean, this restructuring is connected to the announcement we made in December related to the Genetic Services business. We are stopping providing 2 product lines, GPDx and NACE, and we are also exiting some markets. And so -- and of course, that affects the whole company but has a larger effect on this region compared to the other regions. So the restructuring cost is related to people, to a large extent, that are affected by this restructuring action that we are taking.

Yes. Maybe to explain in a slightly different way, Sten, we announced the restructuring, as Par mentioned, in December. The region that's most impacted by that restructuring is EMEA. The reason why EMEA is the most impacted region is because most of the NACE and GPDx revenue was in that region. And most of the markets that we will be exiting is within the EMEA region. So that's, yes, maybe a slightly different way to explain it. Does that answer your question?

Yes, absolutely. That clarifies a lot. And I do remember you announced it, and we were discussing different potential cost savings coming out of it. So it all makes sense.

The next question comes from Ludwig Germunder from Handelsbanken.

So I'll stick to the one question, and it's about the organic growth that you -- I think 3% reported, but 6% excluding discontinued businesses. Would you be willing to help us understand the phase-out of the products? For how long will the tests continue to be a part of your sales? And when do you expect the phased-out products to be fully phased out?

Yes. This discontinued business doesn't relate to the exiting of these 2 product lines. This relates to the exiting of a market announced also last year -- or in December 2023, we announced that. The exiting of these product lines that we announced last December are taking place right now. We expect it to be finalized in Q1.

Yes. Most of it should be -- yes, sorry, just one correction. So we exited that market. I think most people know which market it is. So we exited that market in December 2024. So we have the full 2025 having to explain organic growth in local currencies, excluding discontinued business, and it was because of that exit of that sizable market in Q4 2024. With the restructuring that we announced in December, our goal is to have essentially to be fully out of those tests and most of those markets by the end of the first half. We have set ourselves an accelerated target on that. So we -- in certain instances, we'd like to be done and dusted by the end of Q1. But our commitment in that announcement is by midyear. Does that help to answer your question? And just to make sure we're not confusing a previous market [indiscernible]. And there are a lot of puts and takes here. So I do apologize, yes.

Yes. And just a follow-up on that. Do you expect -- the organic growth, which was 6%, now do you expect that growth to continue to be around that growth rate over the next year? Or how should we think about the future?

Yes. I don't like to guide, and I don't like to guess. The only thing I can say to you is that we are expecting market conditions to return to more normal levels. I mean, last year, it wasn't normal in any shape or form. We had a big APAC effect in Q1. We had a Trump U.S. administration effect in Q2 and Q3. So we do expect more normal market conditions this year. I guess, what does more normal mean? There are big regional variances now, as you can see. But what we've decided to do as a company is double down where the growth is and obviously protect what we have where the growth is a little bit slower. So I don't want to guide. All I will say is that we -- and I hear the same from some of our competitor transcripts. I think as an industry, we're expecting more normal market conditions this year.

The key thing for us is not just driving growth, it's driving profitable growth. So big focus this year on ensuring that we get the right portfolio balance in the regions. I think North America is doing fantastically well, and we're really happy that the investments there are paying off, but we need to continue to drive EmbryoScope penetration. We need to continue to take share gains in Consumables. So I don't want to guide. I'm not going to fall into the trap, but hopefully, I've given you more color around how we see things in 2026 and more of a return to normality. But again, it's got to be about profitable growth.

The next question comes from Ludvig Lundgren from Nordea.

So I wanted to start off a bit on the same theme here on the IVF market environment. And I think in Q3, you highlighted that you saw a pickup in cycles towards the end of the quarter. So I just wonder how this has tracked throughout the quarter? And yes, now, like, into January here, has it continued to improve basically?

Yes, good question. So, as I mentioned before, we didn't sort of see an explosion of pent-up demand in North America following the announcement from the White House in October. But we did see a steady pickup in the cycle growth in the final weeks of the quarter, and that seems to be continuing into Q1. It's very early to say. I haven't even seen our full January numbers yet, but I'm going to -- I was at JPMorgan. I spent a lot of time visiting customers as well in the U.S., and the sentiment seems to be better. What I would say is that the announcements that were made in relation to very significant price reductions, everybody now realizes that that's not the case. But there's clarity now in the U.S. in terms of what the cost of a cycle is going to be.

There are other things like California becoming a mandated state. That's something that was delayed for quite a while. So I mean, it's one stage within the United States, but it's a big one. So I think there's a little more optimism in California, in particular, in terms of cycle rates slowly but surely picking up as we advance through 2026. And then, I don't want to make it all about North America, how do we feel about the rest of the world. Western Europe is looking good and steady, and cycle growth seems to be, again, approaching more normal levels. The Middle East, it's had a big -- that's been a big impact to the geopolitical situation there. And then, as we view APAC, I've commented many times, we believe that there are endemic issues in China in relation to improving the birth rate and the cycle growth, but the government is also increasingly stepping in and approving funding.

There are opportunities in other parts of Asia, which I'm not going to go into for competitive reasons. So relatively normal growth rates returning, we expect, but there will be regional differences. And I think the key thing for us, back to the point that I made on our commercial excellence capabilities, we're really getting laser-focused in terms of where we're doubling down and where we're not going to double down, so where do we see the greatest opportunities to drive profitable growth. Does that answer your question, Ludvig? I don't want to be going around the world giving my sort of prognosis, but that's how we see things at a corporate level.

Yes. Very clear. And then, I just had a follow-up on the gross margin in APAC here. So you highlighted that there was some negative product mix from campaigns, I believe. So I just wonder if it's possible to quantify this in some way. And also, like, will this affect also Q1, Q2 looking into '26?

I mean, I can take the second part. No, we expect the margins in APAC to normalize in 2026. I don't know, in terms of quantifying the mix, we probably can't.

We don't disclose the detail, the effect, but it had an effect, not only in APAC, but also on the total gross margin for the group. But we don't disclose the number.

What I will say is, it was a strategic decision to go after a growth opportunity. So it was a targeted campaign. I mean, 10% growth in APAC, I don't think anybody expected that. It surpassed our expectations, but I think it surpassed our expectations more on the Technologies side. On the Consumables, we very much decided that we had an opportunity to take share in disposable devices, and we went for it. Yes.

Okay. And just very quick on that, so like when you have gained some share now in Q4 in APAC, like, will that also improve growth ahead in APAC? Is that a reasonable assumption?

I mean, that's what we're trying to do. APAC has been pretty stagnant for a lot of the reasons that I've mentioned. The market growth in APAC is pretty stagnant, but we believe we had an opportunity to take share from a couple of competitors in relation to a specific part of the portfolio. So yes, we went for it.

Will that continue in 2026? I mean, taking that magnitude of share, that will be tough, but we do have the share gain momentum. So it should definitely improve our disposable device performance in APAC in 2026. Does that make sense without me giving away too much information? Hopefully, I'm helping to answer your question.

Yes, very clear.

The next question comes from Johan Unnerus from SB1 Markets.

Congratulations to the progress made in the U.S. market, especially as you're investing in commercial reach there. Well, some question relating to gross margins. First, a small one. EMEA, I think you referred to some in-sourcing. Does that has an impact on margins in that region? And I have a second question.

Johan, thank you for your compliment on North America. We're going to take it graciously because we are very pleased with our North America -- and I think we should bear in mind, it's only 2 years ago that we decided that we were going to go after growth in North America. And to be seeing the returns after only having made those investments not so long ago is pleasing to us. Now, we're not losing the run of ourselves. We have a long way to go, but we are pleased with the progress there.

So let's touch EMEA. So what has happened in the EMEA region actually is probably best explained in my CEO comments, and that is with the downturn in activity due to the geopolitical situation in the Middle East. What we have seen is that clinics have in-sourced some of their genetic services business. And we have seen historically, when clinics in-source -- we saw this in North America 3 years ago -- typically, the business -- you might get drip feeds of it coming back, but it's rare that you get all of that Genetic Services business back. So clinics in an endeavor to boost their revenues have in-sourced. They've taken the opportunity to in-source.

The impact on margins, that's a good question. It's also a tough question. It's not necessarily a negative thing because the margins in Genetic Services are lower versus the rest of the portfolio. So they're lower than Technologies and Consumables. So it doesn't necessarily imply a negative margin mix in the region. What we do need to do in this region is, we have to make up for that lost business, right? So we got to drive share gains across the rest of the portfolio, and we have to drive share gains in the other markets in the region. I think we're particularly happy with the Consumables performance in EMEA. So you can see on Page 22 of the report, it's 11% organic growth in local currencies. So that's good. Technologies, a very tough quarter. But if we can move the needle on Technologies there, the run rate on Technologies is doing very well, that will also help the EMEA margin mix. So it's a very long explanation to your question, Johan, but there are quite a few moving parts on that one. But hopefully, I'm giving you context there. Yes.

Excellent. And then, perhaps a more important question on the U.S. It's often easier to improve gross margin when you have better traction as you seem to have. But the process of improving gross margins, changing the product mix and perhaps working on efficiencies as well, as you alluded to, could you provide any timelines on those dynamics?

Yes. I mean, the thing is -- Par, you can chip in here as well. But the investments in sales and marketing, they're done now. I mean, we don't envisage making any further investments in sales and marketing. I would say they're fully loaded. So now, we got -- we have to drive productivity, right? So the revenue per commercial investment, the revenue per sales rep, that needs to go up. We made those investments. It's taken time. But we would expect productivity improvements in terms of revenue generation coming out of those commercial investments. There is a mix component, and we are really focusing on EmbryoScope and witnessing. That's evidenced in the 40% growth in the quarter. We're going to keep doubling down there. I think what we like is that clinic chains are increasingly seeing the workflow benefits from EmbryoScope. It's a big capital outlay, but it also drives efficiency. So that's good.

And then, Johan, we have to look at pricing. I mean, we're still operating in an inflationary environment. We can't carry those costs so inevitably. And the team did a very good job actually in North America last year on pricing. We managed to mitigate a significant amount of the tariff impact. But yes, I mean, inflation is still there, and we will have to look at pricing opportunities actually in all of the regions.

Par, [indiscernible].

Maybe I can just add, we have made our investments in the U.S. We don't intend to increase the level. We will -- we have done the work now. So now, it's -- we have this fixed cost there, and we aim for further growth in North America. And if that happens, of course, the contributor margin will gradually improve if we continue to see growth in North America or Americas and keep the OpEx level constant, which is our plan.

And any sense of the effect on gross margins? Should we expect improved gross margin in the Americas, especially in the U.S. market in '26? Or could you provide some flavor on that?

I mean, with everything fully loaded, our aim and our goal is absolutely to improve the gross margin in North America. I'm sticking my neck out here. You're going to track me on that metric, but that's what we have to try to do, right? I mean, it's very clear in the numbers in this quarter. We've had a fantastic performance on the top line. North America is doing great and APAC did wonderfully well. But we have to work on the margin piece because we don't want Americas to become dilutive overall. So absolutely, the strategic name of the game and where we're doubling down is on the areas where we can improve the margin from what is becoming our fastest-growing region. And it's the largest IVF market in the world. So we want to win there, but we want to win there driving margin improvement. Does that answer your question?

Yes, sort of.

If you want to ask it a slightly different way, and I can see if I can do better without -- yes. What are you missing?

No, no, no. I'm pleased. I mean, I understand the complexity. Of course, it's difficult to provide precise feedback for '26. But yes, I can see the work in progress.

Yes, exactly.

The next question comes from Filip Einarsson from Redeye.

So I wanted to start on something you mentioned both in the call and also in the report, namely the market normalization in 2026. Maybe if you could expand a little bit on this statement and to what extent you expect this to be the graduality of it?

Yes. Great question. So historically, cycle growth has been in the mid-single-digit range. That was not the case in 2025. Based on our best intelligence, and we are very close to the market, but also you can hear it in the competitive commentary and also on the clinic side, the cycle growth was significantly impacted in 2025 for a multitude of reasons, which I'm not going to bore everybody with by repeating it. I absolutely hate going back to this zodiac thing, but we don't have snakes, dragons this year. Hopefully, we don't have presidential statements on IVF. I mean, they're done. They're past us. So, that created a lot of noise.

The situation in the Middle East seems to be holding. Western Europe is looking pretty stable. Cycles are definitely returning to more normal levels there. So we're not getting very excited in terms of an explosion in IVF cycles. That's absolutely not happening. But based on Q4, early indicators, and again, we are -- we've really become laser-focused on steering Vitrolife in a metric-driven way, particularly on the commercial side. And the leading indicators there do point to more normal cycle levels.

How -- the second part of your question then is, how quickly do we get there? How long is a piece of strain? That's a little bit harder to predict. I guess -- well, I don't guess. What we envisage in our company is a slow, steady return to more normal levels. But will we get there in Q1? Maybe. Should we be there in Q2? I mean, unless we have some big disturbances, we would be expecting to get back to those more normal levels in Q2. Does that answer your question?

Yes. Great. And then, I have one more follow-up. So obviously, currency has been a big topic in 2025 and in Q4. Can you maybe elaborate a little bit on if there's any measures taken to limit the impact in 2026, given eventual ongoing uncertainty on the macroeconomic level?

Yes. Currency has been a huge impact for us and for many Swedish companies having exports. Just to give you a flavor of it, the U.S. dollar-SEK rate, you probably know this, but the SEK strengthened almost 17% last year from 1st of January to end of December. And the euro was more like 7%, 8%. And the Danish krona, which is also an important currency for us, was also some 8%. Yen was 14%. So we had a huge impact on currency. So what do we do to -- I mean, we don't really know what happens. We don't work with hedging in our company. What we are trying to do better is to increase our natural hedge by balancing purchases in certain currencies matching the revenue stream. This takes time. So I don't expect us to fix that in a short while, but this is something we need to increase our focus on going forward to improve our natural hedge.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

Going back to the very strong performance in Asia or APAC region, 10%, obviously, very impressive, and you talk about tough in China. Did you have positive sales growth in China despite the soft market or...

Yes. We don't give country breakdown, but maybe the best and fairest way that I can answer that question is that we had growth in almost all countries in the APAC region in Q4. Even -- so I mean, on the Technologies piece as well, Sten, it was a tough year for capital purchases. But we saw a release of budgets, and it was literally in the final couple of weeks of the year. Lucky, we had enough EmbryoScopes in stock to be able to service the demand because it was quite an uptick in the last -- basically in the last 3 weeks. But it was -- yes, I'm not going to answer country specific. What I will tell you is, most of the countries in APAC had a positive performance in Q4.

Sounds good. And any countries doing extremely well, unusually well? Or was it more across the board?

No, I don't think there was any sort of extreme -- I don't think there was any sort of extreme. So we did have a targeted campaign on disposable devices. We saw an opportunity to take share from competitors. And I mean, Sten, you know us very well. Media, we don't -- we've already taken a lot of share on media in APAC. So share gain opportunities are tougher to come by, much tougher to come by. So we've been looking at APAC as part of our strategic review. And we said, where do we have opportunities to take share? We can't continue to sort of grow with the market. And we identified disposable devices as a double down. So we went for that across the region.

And then, the other big sort of needle mover was, we still believe there were opportunities on the EmbryoScope side, even though clinics were sort of managing the capital piece. And when they were released, we were able to capitalize on that. We don't have a sort of Genetics component here, but -- so yes. No, there was no explosion in any one particular country. That didn't happen.

Sounds good because, I mean, 10% is an impressive number given the softness in China. So, well done.

Yes, absolutely.

The next question comes from Jakob Lembke from SEB.

Yes. I just had a short follow-up just on Technologies in North America, if you can elaborate on sort of what countries, what sort of customers and so on?

Yes. That's my favorite question, Jakob, because we had 40% growth in Americas. It was across the region. I think what pleases us most here is that we are starting to crack into the chains. And we came very close -- very, very close to having one of the largest cross-border chains in North America going full EmbryoScope. I think we were 2 short -- 2 EmbryoScopes short of a particular chain being fully converted to EmbryoScope. And that's been tough for us, right, because historically, in North America, we've been able to sell one-off EmbryoScopes, but we weren't really cracking the chains. And you can understand why. I mean, they're big -- it's a big investment. But that started to happen. It started to happen last year. We've adapted our go-to-market model. We now focus on key account manager style. So we have people specifically targeting and talking to the C-suites of the large clinic chains, and it's paying off. So what drove that big 40% increase is, we're starting to move the needle on EmbryoScope in the chains. It's been a heavy lift, but we're getting there now.

And then, I think very importantly, as I always say to the team, don't just sell EmbryoScopes. You have to make sure that they get used. So the other metric that we're tracking, back to our commercial excellence dashboards, is we're checking the revenue generated per EmbryoScope. So we don't just want clinic chains investing in EmbryoScope. We want them investing and using them to drive efficiency. And we're starting to see the run rate in Technologies. That component is picking up very nicely. But it's all markets in Americas. But I should give a shout out to North America because I think the team did a really great job there. Does that answer your question, Jakob?

Yes. That's great.

The next question comes from Ulrik Trattner from DNB Carnegie.

On Genetics and EMEA and the in-sourcing as you noted, you don't expect these sort of share losses to be regained, given that they've gone internal. But is it possible to sort of quantify the risk of continuous in-sourcing as we did see in the Americas 2, 3 years ago? Or is this more temporary related to the macro? Or is this a continuous trend?

Yes. It's a great question, Ulrik. The ones who have in-sourced are the larger ones. So I never like to be complacent, okay? And we don't take any customer or any business for granted, and we have to earn our trust every single day. But the customers that have in-sourced in the second half of 2025 are the bigger ones. So I guess -- and I want to be really clear. I wouldn't call it share losses. It's definite in-sourcing. We can see it. We know the clinics. We have the names. We know the players and then people working there. So I think the biggest impact is likely behind us, Ulrik. And again, we've seen this with in-sourcing in North America. It doesn't always -- well, first of all, it's not as easy as people think.

In any services business, scale is important. Economies of scale are -- they're very important. And I think a lot of clinics that did in-source, particularly in North America, didn't get the type of gains that they expected. Let's see if the Middle East are able to do it more efficiently or better. But it hasn't always paid off, the in-sourcing. I thought you were going to ask me [indiscernible] question, Ulrik. I was waiting for it.

Yes. I think we're finished now. And I'd like to thank you all for your time and attention this morning, for your great questions. We very much appreciate it. So from Stockholm, from myself and Par and from Amelie Wilson in Investor Relations, thank you all very much, and have a wonderful day.

Welcome to Vitrolife Q3 2025 Earnings Call. [Operator Instructions] Now I will hand the conference over to CEO, Bronwyn Brophy, and Par Ihrskog. Please go ahead.

Good morning, everyone. I would like to welcome you to the Vitrolife Group Q3 2025 Earnings Report. My name is Bronwyn O'Connor, and I'm joined this morning by our new CFO, Par Ihrskog.

So I will now move you on to the first slide with our Q3 2025 highlights. I would like to start by highlighting three key achievements during the quarter.

The first highlight is that we delivered 5% organic growth in local currencies, excluding discontinued business, despite the fact that the reproductive health industry as a whole has continued to face substantial macroeconomic and geopolitical challenges during the quarter. The second highlight I would like to bring to your attention is our growth in Americas. Sales increased by 11% in local currencies with strong growth across the entire portfolio and in all markets in the regions. And finally, we delivered strong operating cash flow of SEK 255 million related to positive contributions from our net working capital.

I'll now move to the key financial highlights. So starting with the market. Conditions remain challenging in some of the key markets in the IVF industry. However, we did see some small and early signs of recovery in Americas. In EMEA, Western Europe is performing well. However, the market in the Middle East remains impacted by the geopolitical situation. APAC also shows some signs of recovery with the exception of China. Cycle growth in APAC overall remains below the other regions.

Sales. So sales in the quarter amounted to SEK 835 million, an increase of 5% in local currencies, excluding discontinued business and minus 4% in SEK, impacted by minus 7% due to currency effects. Gross margin, stable, in fact, slightly positive at 58.9% and EBITDA was SEK 253 million in the quarter, an EBITDA margin of 30.3%. This was also impacted by a negative currency impact. And then strong operating cash flow of SEK 255 million from our net working capital, as I mentioned previously.

We will now move on and take a look at our sales and growth per geographic segment. We're very pleased, in fact, with our sales performance in Americas, delivering 11% growth. And even more pleasingly is we saw growth across the entire portfolio and in all markets. So just bear in mind, Americas is the U.S., North America, and also South America. IVF cycle growth is showing early signs of recovery in the U.S. However, share gains drove our growth rates above the market growth rates.

Growth in EMEA was 4%, excluding discontinued business. Once again, we delivered strong growth in consumables as a result of share gains in key markets in Western Europe. The geopolitical situation in the Middle East has impacted the region overall, but all other markets in EMEA remained strong for the Vitrolife Group. Sales in APAC increased by 1%, the first positive quarter for the Vitrolife Group year-to-date. We delivered strong growth across all markets in the APAC region with the exception of China, where cycles remain depressed despite improved reimbursement.

And then another point that I think is critical to point out is the healthy regional revenue contribution of our company. This has been instrumental in helping us navigate the challenging economic environment. So if you look at our share of total sales, we now have 33% coming from Americas, 37% coming from EMEA, and 30% coming from APAC.

Okay. We'll now move into markets region EMEA and take a closer look. So EMEA remains our largest region, delivering sales of SEK 309 million in the quarter and an organic growth of 4% in local currencies. Again, this quarter, sales in consumables were strong, plus 7% in local currencies, excluding discontinued business due to share gains in key focus markets in media and disposable devices. Sales in technologies, plus 6% in local currencies, driven mainly by customer wins for our lab control solutions, which is really nice to see. We are seeing demand steadily increase for our witnessing solution, and customers also really like the integrated EmbryoScope and eWitness solution. Genetics performance was negatively impacted by the Middle East. However, a strong performance by our Genetics business in Western Europe.

Okay. We'll now move on to market region Americas. A very strong quarter in our Americas region despite the fact that cycles have not fully recovered in the United States. With an organic growth of 11% and strong growth across the entire portfolio in all markets in the region, we believe we are fully leveraging our relevance to our customers. The strategic investments that we have made in sales and marketing in the U.S. resulted in us delivering our strongest quarter in 11 quarters, with share gains in key parts of the portfolio.

Strong growth in technologies driven by increased adoption of EmbryoScope across the region, which is great to see. This has been a key focus area for us, as many of you will know. And we are also starting to build a healthy pipeline of customers seeking to install our witnessing solution. So the combined offering of EmbryoScope and witnessing is also starting to gain traction in North America, as we are experiencing in this quarter in EMEA.

Okay. And then our market region, APAC. APAC, the first positive quarter of the year-to-date. So APAC delivered an organic growth of 1%, with strong growth in all markets across APAC, with one exception, that exception being China. We delivered share gains in disposable devices, and our media market position remains very strong across the region. Coming back then to China, despite the increasing reimbursement, we don't yet see an uplift in cycles. Consumer confidence, we expect, is also impacting the timing of patients presenting for IVF. I do want to point out that we are focusing on other key markets in the region where the Vitrolife Group holds strong positions and cycle growth is increasing.

I will now hand over to Par, and he will take you through our geographical segments.

Thank you, Bronwyn. We are now on Page 9, where I will provide some more details of the geographical segments, America, EMEA, and APAC. On Americas, sales amounted to SEK 276 million, reflecting an 11% organic growth in local currencies and 1% growth in SEK, negatively impacted by currencies. The strong growth can be seen across the portfolio.

Gross income amounted to SEK 149 million with a gross margin of 54%. This compares to the last year's gross income of SEK 144 million and a margin of 52.7%, an improvement of 1.3% points compared to previous quarter, mainly driven by product mix. Selling expenses for the quarter rose from SEK 69 million to SEK 77 million, reflecting ongoing investments in sales and marketing in the U.S. as previously announced. The market contribution margin for the quarter was 26.0% compared to 27.5% last year, impacted by the increased investment into sales and marketing capabilities in Americas.

Moving to EMEA. Sales declined by 2% in local currencies and by 6% in SEK, totaling to SEK 309 million. The sales were negative, impacted by currency of minus 4%.

Sales declined by 2% in local currencies and by 6% in SEK, totaling to SEK 309 million. The sales were negative, impacted by currency of minus 4%. Excluding the discontinued business, sales increased by 7% in local currencies. Gross income was SEK 192 million with a gross margin of 62.0%, compared to SEK 198 million and a margin of 60.4% last year, also here mainly driven by the product mix. The selling expenses decreased from SEK 73 million to SEK 68 million. The market contribution margin for the quarter was 39.9% compared to 38.1%, explained by an improved gross margin and lower selling expenses.

In APAC, sales amounted to SEK 250 million, reflecting an increase by 1% organic growth in local currencies, but a 6% decrease in SEK, negatively impacted by currency. Gross income was SEK 151 million with a gross margin of 60.4%, which is lower than previous year's gross income of SEK 167 million and a gross margin of 62.8%, a decline of 2.4 percentage points compared to previous quarter, negatively impacted by currency and negative product and market mix within APAC. Selling expenses decreased from SEK 48 million to SEK 46 million. The market contribution for the quarter was SEK 42.1 million, down from SEK 44.7 million last year.

Let's move to the next slide.

So then, Q3 financial highlights. As earlier mentioned, the sales amounted to SEK 835 million compared to previous year with a sales of SEK 867 million, corresponding to 3% growth in local currencies and a 4% decrease in SEK and 5% increase in local currency, excluding discontinued business. The gross income amounted to SEK 492 million compared to SEK 508 million previous year, corresponding to a gross margin of 58.9%, margin up from 58.6% previous year. The margin improved from a positive product mix despite the negative impact from the currencies.

In the third quarter, the increase in operating expenses was mainly driven by investment in capabilities, especially within IT and digitalization. All-in-all, that gives us an EBITDA of SEK 253 million compared to SEK 289 million previous year, which gives us an EBITDA margin of 30.3% compared to 33.4%. The decrease in margin is mainly impacted by currency fluctuation as well as an increase in investment in capabilities, especially within IT and digitalization.

Let's move on to the next slide.

Some comments about the operating expenses. In Q3, our operating expenses were SEK 20 million lower than Q2 this year, but compared to Q3 last year, OpEx was SEK 40 million higher, though last year's Q3 was lower than normal levels. Overall, Q3 aligns well with our average OpEx level over the past seven quarters, reflecting a consistent and stable cost trend. On the selling expenses, we had higher selling expenses in the U.S. due to the investment in sales and marketing, but it was offset by lower costs in the other regions, so it stayed stable.

On administrative expenses, it was increased by the strategic investment in IT and digitalization. Our R&D expenses slightly decreased year-over-year, mainly due to timing. And then on other operating expenses, this is mainly related to currency fluctuations.

Next slide, please.

And then finally, I will look -- we will comment upon the year-to-date numbers. Sales for the first 9 months amounted to SEK 2.5 billion, corresponding to 1% growth in local currencies, a 4% decrease in SEK, and a positive 4% growth increase in local currencies, excluding discontinued business. The gross margin decreased from 58.6% to 58.1% mainly due to currency fluctuations. The EBITDA amounted to SEK 253 million compared to SEK 888 million, corresponding to an EBITDA margin of 29.5% versus 33.5% previous year.

The decrease in margin is heavily impacted by currency effects driven by a strengthened SEK against other currencies. The margin was also negatively affected by the increased selling expenses of SEK 577 million in the U.S., but also negatively by the product and market mix.

Net income amounted to SEK 301 million compared to SEK 375 million previous year, heavily impacted by currency fluctuations, which gives earnings per share of SEK 2.23 compared to SEK 2.76 previous year. Our operating cash flow amounted to SEK 475 million for the first 9 months compared to SEK 640 million previous years, whereof SEK 255 million came from Q3. Changes in working capital had a negative effect of SEK 97 million this year compared to SEK 97 million last year. Our leverage, net debt to EBITDA, improved to 0.7 compared to 0.8 previous year by the end of the quarter.

And by that, I will now hand over to you again, Bronwyn.

Thank you, Par. So you will have seen me present this slide several times. And what I would like to highlight is that we are delivering on our commitments and doing what we say we will do. So this slide I have presented, I think this is my third time to present it. It highlights what the focus areas were for 2025 and beyond: growth, innovation, and operational excellence.

So just if we take a look at growth, continue to drive share gain in key markets, leveraging the full breadth of the portfolio. This is exactly what we are doing in Americas, as an example. So we're doing what we say we will do: accelerate the penetration of our combined EmbryoScope and lab control solutions. This is what we're doing in EMEA. You can see it in the quarterly results. When it comes to innovation, if I could highlight strengthen market access capabilities to bring new products to market faster. We have launched Ultra RapidWarm Blast. We received regulatory approval for EmbryoCath in Europe and the United States this quarter. So again, here, we are doing what we say we will do.

On the operational piece, automated manufacturing to increase capacity of key growth drivers. We have significantly increased capacity at one of our sites in the United States due to automation.

And then the macroeconomic environment. Well, I think we would all agree, it's been a challenging year for the med tech industry as a whole. It's been a particularly challenging year for the reproductive health industry. We continue to assess multiple parameters, not least of which is the impact of the U.S. presidential IVF announcement, the most recent one on the 16th of October 2025. And of course, we continue to monitor the development of the situation in the Middle East and the impact that the recent peace agreement may have on IVF cycles in the region.

Before we open up for questions, I would like to thank the exceptional team at the Vitrolife Group for all of your hard work and dedication. I would also like to thank our shareholders for your support and your belief in the Vitrolife Group. Thanks, Micah, thank you very much, and we will now open up for Q&A.

[Operator Instructions] The next question comes from Ulrik Trattner from DNB Carnegie.

I have kind of broad-based questions regarding consumables in the different geographies. So just looking at consumables in Americas, what continues to drive your market share gains? And the same question goes for EMEA. And I guess for EMEA, it's more on the case of one of your competitors at being in a restructuring phase. Just trying to figure out how long this sort of gains could last for?

And as for APAC, I hear all what you're saying in terms of demographical challenges, once policy having its effect. But don't you believe that this is more of a consumer confidence kind of issue? I guess sort of the demographic changes in APAC has not really changed since the 2019 or pre-pandemic, while the sort of general economic health of China has. That would be my first question, please.

Okay. Thank you for your question, Ulrik. Yes. So the performance of the consumables in all our regions, as you -- well, it's positive. It's positive everywhere. I would say that in 2024, we took a lot of media share. We are now leveraging that even stronger media position to take share across the rest of the portfolio.

I can't tell you who we're taking share from because we have one competitor who reports externally, but we don't get a breakdown, and the other large competitor, as you know, is privately held. But what we do know is that our growth is significantly up versus the cycle growth that our customers tell us across the various regions that they are experiencing. So I can't say who we're taking share from, but we are firmly of the belief that we're taking share with the growth rates that we experience in the different regions. And what we see from our own numbers is it's across the entire consumables portfolio now, Ulrik.

Then your question on APAC, we think it's a combination. So yes, obviously, we have the endemic issues in APAC in terms of desire to have children and low fertility rates. But we do believe that the macroeconomic conditions in China are exacerbating the situation. As we know, reimbursement has improved in the country, but we haven't yet seen an uptick in cycles. So it's likely multifactorial. I think what's interesting to note, and you'll see that in my CEO comments, is we do see growth across the rest of the region. So China is becoming an outlier in APAC in terms of the growth that we can deliver for our company. So hopefully, that helps to answer your questions, Ulrik.

Yes. And a follow-up, like a year ago, a year and a half ago, a lot of talk about the Indian market. So the Indian underlying market growing at a very rapid pace, you tagging along with that market. And it's been quite silent sort of ever sort of in the last few quarters. Can you provide us with some type of update on what's happening in India?

Yes. So that's intentional. It's intentional because this market has become increasingly competitive, and everybody wants to know where the growth and profitability is. So that's why we don't break down our APAC numbers; so we don't give additional detail. I'm sure we would have some very interested competitors probably listening in this morning, wondering what the India breakdown is.

India is a very large market, of course, with a lot of potential. Usually, in medical devices, it's also a low-priced market. So while it may have high growth potential, it doesn't always have high growth that's profitable or at least profitable to the levels that we would need at the Vitrolife Group. But it is clearly a driver. It does form part of our APAC region, but it's not the largest market in APAC for us. So that's probably about as much detail as I would like to give on India for obvious reasons.

The next question comes from Suzanna Queckborner from Handelsbanken.

I have a more broad question. I'd like to get your opinion on how or where you see Vitrolife going with future M&A agenda and whether your stance has changed regarding this recently?

Yes. Great question. Thank you, Suzanna. So I guess, like all companies in the space, we are monitoring potential acquisitions. I think with the consolidation that has happened in more recent times, a lot of the larger-scale acquisitions are off the table now. And for us, I think as we've always said, we have a very clear strategy in terms of building an end-to-end platform. So any of the targets that we are looking at would need to be synergistic with that strategy. They would also need to be able preferably to deliver accretive growth. And then the profitability needs to be broadly in line with our profitability levels, which are typically significantly higher than most of the other players.

So I'm not saying there's nothing for us to buy. They clearly are. But of course, those targets need to satisfy our key M&A criteria, and they also need to be available at the right price. Multiples have come down a lot in MedTech. So yes, I guess, from an industry perspective, it's probably a good moment to buy, but still, it has to be the right company at the right price with the right fit for the Vitrolife Group. So that's probably as much as I can say right now, Suzanna.

And just to quickly follow up on that. Are there any areas that you're particularly interested in more than others?

Yes. I would say there are one and two areas which I'm not going to divulge, which would be of more interest. I mean we have a broad portfolio now. We have a lot of differentiation. It's really -- a lot of it is about bolstering the position that we have and staying ahead technologically. But there are a couple of -- yes, I guess, what I would call tuck-ins, potential tuck-ins from a portfolio standpoint.

And then as a second question, with regard to your strategy in the U.S., we now see that you have 11% organic growth. You've made some investments in sales and marketing. How should we think about that going forward?

Yes. So from an expense perspective, I think sales and marketing line for Americas will be stable. We are -- sorry to use an American phrase, but we're kind of fully loaded for now. The investments that we made are -- they're driving the growth that we saw in the quarter. So we probably don't need to do anything additional for now. Obviously, we have to very closely monitor the effect of the announcement on the 16th of October and see what that means as we head into 2026. But for now, I think it's sort of steady as she goes on the sales and marketing investments in North America.

The next question comes from Johan Unnerus from SB1 Markets.

Could you provide perhaps a bit further insight into the gross margin? It's pretty impressive or strong given the circumstances, FX headwinds, different product solution mix, and presumably some tariffs as well.

Yes. So Johan, thank you for the question. Yes, there are multiple factors in there. So it's mix for sure. So product mix and regional mix. I think our team has done a really excellent job in terms of managing the tariff impact. So we did mention during our previous earnings that we did have to increase our prices to help mitigate against that tariff impact. And the team in North America, in particular, did a superb job there. So that largely helped to insulate us from that. And then I guess we're being more strategic in terms of where we're doubling down from a portfolio standpoint. So all of these factors are playing a role there. I don't know, Par, if there's anything that I've missed.

No. But on the currency part there, we see on top line negative 7%. It's very much driven by the strength of SEK towards U.S. and euro, but of course, all currencies. And that, of course, flows through the whole income statement down to the bottom line, the impact of the currency.

And yes, a follow-up on the U.S. side. It's pretty healthy your performance in the U.S. this quarter. Of course, there are quarterly variations, but also you're putting in effort to go-to-market investment in OpEx. What is the dynamic here? How much is sort of natural variations, your early traction from your early traction from improved go-to-market strategy or something else?

Yes. So I think it's a couple of things. First of all, thank you for the question. I think it's a couple of things. I think it's the increased investment. I think it's the adjustments that we've made to our go-to-market model. We've ramped up our marketing, which has increased our awareness. We've sharpened our branding. I mean the Vitrolife Group is synonymous with quality and service. And Americans like high quality, and they like best-in-class service, and that is synonymous with our company.

So I think it's a combination. I think it's the investments, the go-to-market, the high-quality products, the really good service, all of these things are leading to share gains and wins in key accounts across the United States and Canada, it has to be said as well. And in fact, well, I should also call out -- I mean, Americas, it's Canada, as I said, U.S., and LatAm. We have growth across all of the markets and all of the portfolio. So big brother is U.S., but the other markets are also performing nicely for the company.

Excellent. And congratulations, a pretty good quarter given the circumstances.

Thank you, Johan. We won't get ahead of ourselves, but it's a good quarter, yes. Thank you.

The next question comes from Jakob Lembke from SEB.

I also have a question on the U.S. and Americas. And my question is, do you expect that the strong market share gains you're currently seeing that they are sort of on a similar level as recent quarters? Or are they accelerating? And also if you think that this momentum will continue into next year, also considering that you mentioned that you expect to invest less in the U.S. commercially here going forward?

Yes. So thank you for the question, Jakob. I think they're accelerating because, obviously, we see the breakdown by product. We don't report that externally. So we can see in some of our key product groups, if we look at the rolling 12, that it's actually accelerating. And we think this is a return on the investments that we've made there. How sustainable is that going forward?

Well, I mean, if you look at our five-year strategy, our #1 double-down focus market is the United States. If we are going to win and deliver on our mission of becoming the leading global player here, we're going to need to keep this type of momentum up in North America. I'm sure our competitors will have something to say about that, but we're not going to have it all our own way. Nobody does. But we are -- certainly, our ambition is to keep this momentum up. Where can it accelerate, and where are we going to become increasingly challenged?

Technologies, EmbryoScope with witnessing, that's a key differentiator for our company. And I think we should be able to gain increasing traction there. On the consumable side, continuing to take this level of share, we're going to have a battle on our hands, but we have to be ready for that, and we have to back ourselves. So I mean, this is the plan. What you're seeing in this quarter is -- what you're starting to see, again, I don't want us to get too ahead of ourselves. It's very important not to be complacent, especially in America. But what you're seeing in this quarter is a return on the investments that we've made, staying focused on our strategy despite the fact that we had to navigate some fairly bumpy quarters as an industry.

And then I think the team, the team that we have on the ground there, we've recruited top industry talent and complemented it with a lot of in-house experience that had been built up in the company over many years. So it's a lot of different factors, Jakob. But I think the key thing here is not to be complacent. It's a good quarter. We need to keep up the momentum. We need to stay focused, don't get distracted, and stay the course. That's the plan.

Okay. And then just a follow-up also on the U.S. genetics business. I mean it seems to be developing quite nicely. Would you say that you have finally now turned that around and that you're confident that you can also take market share there going into next year and increase profitability?

Yes. So Genetics had actually had an excellent quarter in North America, Genetic Services. So obviously, in Genetic Services, we have the services business and we have the kits. The services part is doing extremely well. Can we continue this momentum in North America into next year? Yes, we should be able to because we have some large network wins there. So we have some good tailwinds. Yes, what I would say is that the Genetics business has been impacted in the Middle East. So you can see that in our EMEA numbers. We do have -- not very large, but a sizable genetic services business in the Middle East. That has been impacted.

But broadly, services -- the genetic services side is -- yes, it's pretty steady and holding up a lot better than it has in previous quarters. I never like to get ahead of myself and say we're going to shoot out the lights, but it's certainly looking a lot more stable than it has certainly in the couple of years that I've been the CEO of the company. So yes, hopefully, that answers your question, Jakob.

The next question comes from Ludvig Lundgren from Nordea.

So continuing on the U.S. and Americas. So you highlighted that cycle growth like recovered late in Q3 at the second part of the Q3. So then I assume the exit rate was a bit higher than the average or total growth rate in the quarter. So just to set some reasonable expectations here for market development heading into Q4 and '26. Are you able to share how much difference we have seen throughout the quarter in cycle growth?

Yes. So first of all, thank you for your question. I can't share exact percentages, but we did start to see a pickup. It was really just in the last month of the quarter, to be honest, the first two months of the quarter, we didn't see a pickup, but there is also a seasonal effect there, which can impact that. Despite the fact that we saw a pickup, we still don't believe that cycles have fully recovered in the U.S. So it remains to be seen what the impact of the announcement on the 16th of October will be. But it was more a case of a slow, steady increase in the last month of the quarter. There was no explosion of pent-up demand or anything like that. I mean it wasn't -- we're not talking about a very sizable jump, more slow, steady flow of IVF patients coming back to the clinics.

Okay. Understood. So, a slight improvement, then I suppose in Q4. But then just a follow-up on the IVF announcement last week. So do you expect this to yield any significant change in either cycles or like IVF insurance coverage maybe into '26 or yes ahead?

Yes. So I have the White House statement here in front of me. You can actually print it -- you can print it off, anybody can access it. Look, this is good news for the IVF industry. It's not brilliant news, okay? But it is good news. So if you remove a lot of the hype and you get down into the facts, what does this actually mean? What it actually means is a reduction in the price of the drugs, of the fertility drugs for patients. If you look at the White House fact sheet, there's talk of estimates, women, and I quote, women can save up to $2,200 per cycle of fertility drugs. In the United States, nobody pays list price for drugs. So I think that's the maximum amount that a patient would expect to save. Nonetheless, it is a saving. So it's a saving. It's not huge, but it is a saving. So that's a good thing.

The insurance piece is more complicated, but it is positive. So essentially, what happens with the way the insurance piece is now designed is you have -- typically in the United States, you have healthcare coverage. And then usually, people will have additional or supplemental things like dental, it can be dental, can be hearing. And now there will be the opportunity to have supplemental fertility coverage. That is also a good thing, but that's going to take time. It will take time for that to come through the system.

So what we are expecting, our interpretation, okay, and there can be various interpretations, is, yes, it's positive. Are we going to see an explosion in pent-up demand and suddenly, employers all over the U.S. will grant coverage, fertility coverage to their employees? No. It's more likely to be a slow, steady improvement in terms of fertility coverage for employees.

So good news, more likely to lead to slow, steady improvement as opposed to a very significant pickup. I guess my own personal assessment is at least we now have clarity because what we had in quarter two and in -- yes, for most of quarter three was uncertainty. Are we getting an announcement? Are we not getting an announcement? What is it going to entail? What is it not going to entail? The really good thing to come out of all of this from the 16th of October is patients now have clarity and they can decide how they want to time their IVF treatment. So personally, I see this as the biggest advantage of all.

So yes, hopefully, that helps to answer your question a little bit. There's a lot to unpeel in that announcement. If you separate the hype from the facts and the 2,320% reduction, this is essentially what it means. Yes.

And then I just wanted to squeeze in one more for Par on operating expenses, up 4% year-over-year. And I think it's mainly explained by these IT investments in admin. So just if you could give some flavor on these investments, like is it up from Q2? And how should we expect this to develop in Q4 and into '26?

Yes. As I explained, it's the investment in IT and digitalization across the company in various functions in manufacturing in admin, and so on. We have invested in the last couple of quarters somewhat more on IT and digitalization, and the increase compared to last quarter -- the quarter last year is not only IT digitalization, but it's a big part of that increase. But compared to Q2 and Q1, it's more or less in line, slightly higher perhaps, but more or less in line.

The next question comes from Ulrik Trattner from DNB Carnegie.

A little bit different angle here, sentiment for genetics and predominantly PGT-A. I note from a lot of focus on STRA and ASRM on workflow protocols, how to manage sort of PGT-A workflows. So where is sort of the customer sentiment, and where are we at in terms of your commercial traction in -- both in EMEA and in the U.S. I know that you're saying that you're having a bit of struggle in the Middle Eastern part, but good traction in the Western Europe and U.S. is obviously doing quite well. So where are we at segment-wise?

Yes. So thank you for the question, Ulrik. PGT-A, it's accelerating for our company. We're doing very well. And when I say PGT-A, you know this, Ulrik, I mean the PGT-A family of family of test, PGT-A and PGT-M. The growth is more than robust. It's very strong in North America, and it's also strong in EMEA and in Western Europe. I do agree with you on the workflow piece in terms of guidelines and bringing more consistency and standardization to that workflow. But we see that as a positive thing. Standardization is good. Guidelines are good. We welcome that, and it tends to positively impact us as opposed to negatively. So yes, I mean, the PGT-A family of test is a key growth driver. And for us in our key markets, it's very healthy.

And how about the Embrace test and essentially your entire noninvasive family of tests? How are those received, and how is that looking?

So also very well received, high growth, albeit from a much lower base, very strong growth for Embrace, actually. So yes, it's -- noninvasive is, I suppose, in many ways, the future. But a lot of people like the standard tests as well. But if you look at our portfolio, the noninvasive piece in general, the growth rates from lower base are significantly above the growth rates across the rest of the genetics portfolio. So you're selling on there.

Yes. And would you say that customers have overcome sort of the issues with potential maternal cell contamination of noninvasive PGT-A? Or has that been lesser of an issue in reality versus what was implied technically?

Yes. I think it's less of an issue because there's much more education around that now. So we -- I mean, initially, clinics would put push back, Ulrik, on the contamination piece because they didn't understand it. Now I think with increased education and understanding, they appreciate the benefits of the contamination factor now. So it isn't -- it's not so much an issue anymore at all, really. Yes.

And an additional follow-up on that because this leads into potentially sort of the million-dollar question on your end. When can we expect a combination of a noninvasive PGT-A test and error test, and time lapse or your EmbryoScope on the U.S. market?

Well, that's a million-dollar question or a billion-dollar question, which I could never reveal because it's such a source of strategic and competitive advantage to our company. But we have our R&D programs, and we're working on them steadily. And most of them are on track or slightly ahead of schedule. And that's about as much as I would like to say on that topic.

And last question on my end. And since we have Par on board, I need to -- looking at the balance sheet and potentially another direction beyond M&A, I guess you're happy with your current portfolio, could add a few product X, Cryo, Genetics, but I guess platform acquisitions are out of the picture. How about not just exploiting the option of doing buybacks?

Yes. Thank you. That's a good question. Yes, we are looking into different alternatives, what to do with the excess cash. And we will, of course, have our view and recommendation to the Board. But ultimately, this is, of course, a Board decision.

But you have suggested Board of Directors.

I have not suggested anything yet. I'm only three weeks in here. But we are looking into that. And down the road, we will suggest our proposals to the Board. But ultimately, that is a Board decision.

The next question comes from Suzanna Queckbörner from Handelsbanken.

Just one more question relating to the U.S. share gains. So you said that you've been taking share gains across the entire portfolio. I was wondering if, within Genetics, there's been the long-term ambition to sell more high-margin tests versus low-margin tests. Can you maybe talk a bit about this dynamic in terms of the lab testing companies, and yes, whether you've been able to make that transition?

Yes. Fantastic question. Thank you, Suzanna. So within our PGT-A family of tests, we do have levels of differentiation. So obviously, I mean, you know this very well with your background. We have PGT-A. We have PGT-A+. And some of those tests, I won't reveal which, but some of those tests have a higher margin profile. So what we are doing is obviously focusing our efforts on the more differentiated, higher-margin tests in order to improve the profitability. Essentially, we're doing exactly what you're asking in your question. How do we go about that? It's doubling down on the differentiated areas where we can command a premium price because of the level of differentiation that could be that can be slow, it can be feed, the various different elements in there. Does that answer your question, Suzanna?

Yes, I think it does.

The next question comes from Jakob Lembke from SEB.

I have two further questions. Firstly, on APAC, I mean, 1% growth here in the quarter, and you say that regions outside of China going well. So I guess we could almost infer them that China is declining. So given this, could you maybe break down your expectations for APAC growth next year, sort of what you see in China and outside of China?

Yes. Thank you for the question, Jakob. So yes, I mean, China has -- the entire IVF industry in China is impacted, as we know. And obviously, we have a lot of conversations with our colleagues in the drug company. So they're seeing the same dynamic. But what's interesting is the rest of APAC is performing pretty robustly, at least it is for us. So the key question for everyone is, when does China start to improve? When do the improved reimbursement, when or do the improved reimbursement conditions start to kick in?

I think to one of the earlier questions, how much of this is linked to macroeconomic sentiment, there is an element of that. So it's complicated, Jakob, to sort of assess when does China turn. I think what's key for us is that we hold our very strong position in China, like we have market leadership positions in certain key categories, very strategic and important ones. So making sure that we continue to hold very firmly there, and we are. And then accelerating our growth across the rest of the region, and we're also doing that. I mean, as I'm speaking to you, I can see our growth rates in the other markets across the region.

So it's really a case of holding our position firmly and strongly in China, as hopefully, market conditions improve there and then accelerating our growth across the rest of the region and reducing our reliance on China. And that's how we've been able to turn APAC positive this quarter. Hopefully, that answers your question, Jakob. I need to be rather circumspect in terms of the level of detail I give on APAC.

Yes, I understand. That's fine. My second question is sort of a follow-up to the admin costs, which has been surprisingly high this year, both here in Q3, you mentioned IT investments, and they were also quite high in Q2. So just if you can give any thoughts on admin costs for 2026, if they will continue to expand or sort of normalize, or yes, maybe decline. Yes.

Yes. No, as I said, the Q3 operating expense aligned well with our average OpEx level over the past seven quarters. So we see it as a consistent and stable cost trend, and we don't have any plans to increase that from this level. Of course, we are exposed to inflation and stuff like that, that we will have to handle, but we don't have any major plans to increase. But of course, our strategic investments in IT and digitalization is important for us, and we will continue to further develop our capabilities in that area. Yes.

Yes. If I would add, I think the OpEx, to Par's point, has been very stable for seven quarters. What has changed is the mix. So obviously, we've been trying and have very tight cost control measures throughout the year. And so we do see some areas coming down, but other areas where we're strategically investing in a very premeditated way, and IT and digitalization is key there. So yes, hopefully, that helps to answer your question, Jakob.

Yes. And maybe if I can take a short final question just on technologies, it was a very strong quarter Q4 last year, and what you see there for Q4 this year.

Yes, it was. It was a huge quarter. Typically, it is our largest quarter of the year. The comps will be challenging. So there's kind of pros and cons on this one. Challenging comps, that's a headwind. But typically, Q4 is the strongest quarter. So that's a tailwind. We do have a very good pipeline, very robust pipeline.

And as I mentioned earlier, the combined EmbryoScope and eWitness is starting to gain traction. So that's a tailwind. But throughout this year, I think across the entire med tech industry, capital purchases have been delayed and postponed. We ourselves see that the selling time of EmbryoScope has lengthened. We do very tight funnel management using Salesforce across all of our regions on EmbryoScope. So we can see the metrics, and we know it takes longer for the deals to come in. But we don't see cancellations of orders, and we don't see needs dropping out of that funnel. So yes, I think there are pros and cons going into quarter four. The team are very focused on driving that. Yes, I guess that's about as much as we can say for now.

The next question comes from Ludvig Lundgren from Nordea.

So just a very quick question, a follow-up to Jakob's question there. So yes, quite stable OpEx year-over-year, but you also should have some headwinds on the OpEx side from FX. Like looking at OpEx to sales, you're up a bit year-over-year, right? So then I just wondered like, yes, for us modeling, is it possible to share an organic like OpEx increase year-over-year, and how that has developed here in Q3 specifically?

Sorry, can you clarify that question again, please?

Yes. So basically, what I'm requesting is if you have an organic like operating expense increase because we saw a 4% increase reported, but you probably have some tailwind on the cost side from FX.

Yes.

Yes, we have, of course, that as well. So yes, and we have an organic increase partly offset with the currency impact, of course.

Okay. So is the organic number closer to 10% or like just to get a sense of how much costs are growing here into Q4?

Yes. We don't disclose that number exactly, but it's, of course, is higher than 4% and closer to 10%. That's a good estimate.

But you are correct, Ludvig. There is obviously a currency element in there. There's currency element everywhere. It's flowing through all of the financials, as you can see.

Okay. I think we need to finish up there. Thank you all for your time, your attention, your engagement, and your questions.

Good morning, everyone. I would like to welcome you to the Vitrolife Group Q2 2025 Earnings Report. As mentioned, my name is Bronwyn Brophy O´Connor. I'm the CEO of the Vitrolife Group and I'm joined by Helena Wennerström, our acting CFO. I would like to now move you to the slide entitled Q2 2025 Highlights.

I would like to start by highlighting 3 key achievements during the quarter. The first highlight was the performance of our Consumables business, delivering 9% organic growth in local currencies, excluding discontinued business. This growth rate is significantly above current market growth rates in the quarter, and there is no doubt that we are taking share from the competition across the portfolio.

The second point I would like to highlight is the performance of our Americas region, delivering 5% organic growth in local currency. This is despite the fact that market conditions were very challenging in the quarter due to a significant drop in cycle numbers in the U.S. following the signing of the IVF executive order on the 18th of February 2025.

And the final highlight I would like to share is that we became the Lead investor in AutoIVF, another key milestone as we advance our strategy of creating an end-to-end IVF platform for clinics.

We will now move to the next slide, please. In addition to navigating an accelerating currency headwind in the quarter and the evolving tariff situation, this was a challenging quarter for the reproductive health industry as a whole. Following the signing of the IVF executive order in the United States, we witnessed a significant drop in cycles versus quarter 1 and versus the same quarter last year as patients postponed their IVF treatment in anticipation of greater financial support. To date, we have no further details on what this support will entail.

In Asia, we saw some small signs of recovery in China, but cycles have not returned to pre-dragon levels. We see stronger recovery in Southeast Asia. EMEA is performing well despite the impact of the situation in the Middle East.

So taking you through the numbers. Sales in the quarter were SEK 871 million, minus 7% in SEK, impacted by minus 8% due to currency. Our CFO, Helena, will take you through the currency impact on the financials of our company in the next slide.

We delivered an organic growth in local currencies, excluding discontinued business of plus 3% despite the wider macro and industry-specific challenges that I have just mentioned. Gross margin decreased 58%, also impacted by currency. EBITDA decreased SEK 243 million, resulting in an EBITDA margin of 27.8%. The margin was heavily impacted by currency and also the increased investment in sales and marketing in the U.S. played a role.

Operating cash flow, SEK 151 million and earnings per share SEK 0.74. If we then take a look at the first half year of 2025, sales were SEK 1.7 billion. That's minus 4% in SEK, impacted by minus 4% due to currency. Organic growth plus 3% in local currencies, excluding discontinued business year-to-date. EBITDA, as you can see there on the slide, SEK 500 million and operating cash flow, SEK 220 million.

I'm now going to hand you over to Helena, who will take you through the specifics of the currency impact on the Vitrolife Group. Over to you, Helena.

Thank you, Bronwyn. We are now on Page #5, where we will provide a more detailed analysis of the currency situation in the first half of 2025 as development accelerated significantly in Q2 2025. So some words about what is reflected in translation and in transaction effects.

Translation effect arises from the net investment in foreign subsidiaries, regulation impacts the equity. Assets and liabilities translated on the closing day rate, regulation impacts other operating items.

Transaction effects attributable to income and expenses converted at the average rate for the period. However, transactions in foreign currency are measured in functional currency exchange rate that applies on the transaction date. Now over to impact that has been observed in this result for the period.

In Q1, if I could draw your attention to the arrow on the right-hand side, we can clearly see a significant strength in Swedish krone versus other currencies by the end of the quarter 1, which impacted the result with translation effect of minus SEK 13 million but no major transaction effects in the period.

In Q2, Swedish krone has been less volatile, and we can see less impact of translation effect in the operating expenses amounted to minus SEK 5 million for the quarter, but significant transaction effects in the result.

Going to the currency effect in sales Q2 2025, it amounted to SEK 73 million, corresponding to minus 8% for the quarter. And currency effects on the sales year-to-date 2025 total to minus SEK 77 million, representing approximately minus 4% for the period. Notably, only minus SEK 4 million of this impact relates to the transaction effects from Q1 2025.

A large part of the transaction effect was visible already in the gross result. But when it comes to operating cost, there is a counter effect of foreign cost and the currency impact, but still we have a large part of the operating cost -- as a reference in 2024, change in the Swedish krone.

As a reference in 2024, change in the Swedish krone exchange rate against Vitrolife Group all top currencies of plus/minus 10% would have effect on income before tax of plus/minus SEK 141 million for the full year. We are short in Danish krones and Swedish krones, long in all other currencies as shown in the Annual and Sustainability Report for 2024 in year 2.

And by that, I will hand over to you, Bronwyn, again.

Thank you, Helena. We can now move to the next slide, titled Sales and Growth for Geographical segment.

Sales in the Americas region increased by plus 5% despite the very challenging IVF climate in the United States post the IVF executive order that I have previously mentioned. The growth that we delivered was primarily driven by share gains in genetic services in North America. The comparables and technologies were exceptionally challenging as we grew 174% in technologies in Q2 2024 and due to closing a large EmbryoScope deal with the clinic chain. Even with these very high comps, technologies, America were only minus 1% behind the previous year.

A strong performance in our largest region, EMEA, driven by what has to be said, an exceptional performance in our Consumables business across the region, delivering 17% growth in local currencies excluding discontinued business. We most definitely took share from competitors in several categories. This region also had substantial comparable challenges in technologies as we grew plus 50% in Q2 in 2024.

Sales in APAC were flat with continued market weakness in China, although we saw a more robust recovery in Southeast Asia. The overall cost of raising a child in APAC appears to be impacting cycle numbers in the wider region. And if I can draw your attention then to the share of total sales, you can see that EMEA continues to be our largest region with 33% share of total sales, followed by Americas with 34%.

Okay. I'll now move on, and we'll take a deeper look at market region, EMEA. So as I said, a strong performance by our largest region, driven by Europe, a Vitrolife Group stronghold, it has to be said, where we continue to expand our market leadership position in several key markets and parts of the portfolio.

In the region, our total growth was minus 8%, impacted by minus 5% in currency and minus 8% in discontinued business in the quarter. To repeat, our organic growth in local currency, excluding discontinued business, was plus 5%. Sales in consumables were plus 17% in local currencies, excluding discontinued business, and I want to thank the team for the fantastic job that they did, taking share across the portfolio in all markets.

Sales in Genetics in this region were impacted by the situation in the Middle East. But we did see steady growth across the portfolio in other markets, which was encouraging to see.

And then a tough quarter here for technologies in the region, as I previously mentioned. However, what is very encouraging to see here is that the revenue per installed EmbryoScope is increasing steadily.

Okay. We will now move to market region, Americas. So tough market conditions, as I mentioned, in parts of the America region, and this is as a result of the IVF executive order, which started to impact cycle levels as we moved into Q2. In the Vitrolife Group, we conducted a patient survey across the high-volume IVF states in America, and it confirmed that couples were delaying their IVF treatment while awaiting clarity on financial support.

The statement from the White House, just for those of you who haven't had a chance to read it, the statement from the White House, and I will quote was to aggressively reduce out-of-pocket costs for IVF. Clearly, when this materializes, this will be good for patients, but we are still in a holding pattern, awaiting further news from the U.S. administration. Total growth of minus 6%, impacted by minus 11% currency factor here. So an organic growth in local currencies of plus 5%.

As I mentioned before, an exceptionally strong comparable quarter last year for technologies due to a large purchase from one of the biggest clinic chains, cross-border clinic chain, in fact. But what I would say, despite the drop in cycles and the very strong comps in technologies, we still managed to deliver growth, and this is due to share gains in our Genetic services business, which is performing very strongly this year across the entire portfolio. So some good strong share gains and momentum in Genetic services.

Okay. I'd now like to move on and take a deeper look at market region, APAC. Market conditions in APAC are quite mixed from one market to another. Cycles have not returned to pre-dragon levels in China and Australasia is flat and even negative in certain parts. But Southeast Asia is showing good signs of recovery. What we are seeing across the region is the delaying of capital purchases as chains and individual clinics in fact, manage their cash.

Total growth of minus 8% impacted by minus 7% due to currency fluctuations, so a flat organic growth in local currencies. Negative growth in technologies despite a healthy sales funnel of EmbryoScope because we are impacted by the delayed capital purchases, especially in the larger markets.

The shining light here is again our consumables business, which is performing well due to share gains from competitors as opposed to cycle growth. And in fact, consumables performed well in all markets even though impacted by lower cycle growth rates.

So with that, I will hand you back over to Helena, who will take us through the Geographical segments.

Thank you, Bronwyn. We are now on Page #10. Where I will provide a more detailed analysis of the Geographical segments, Americas, EMEA and APAC.

Starting on the right-hand side. As Bronwyn mentioned earlier, total sales amounted to SEK 871 million with a gross margin of 58%. In comparison with the previous year, sales were SEK 941 million with a gross margin of 59.9%. The market contribution was SEK 302 million with a contribution margin of 34.7%. In the same quarter last year, it was SEK 369 million, with a contribution margin of 39.2%, a decrease of 4.5 percentage points, primarily driven by currency fluctuation changes and slightly increased supply chain costs.

Let us now take a closer look at the Geographic segments. On the left-hand side, in the Americas, sales totaled SEK 295 million, reflecting a 5% organic growth in local currencies start the decline of 6% in SEK, negatively impacted by currency of minus 11%.

As Bronwyn mentioned earlier, we had a solid growth despite the significant drop in cycles following the U.S. IVF executive order. Gross income totaled SEK 160 million with a gross margin of 54.2%. This compares to last year's gross income of SEK 181 million and a margin of 57.3%, a decline primarily driven by currency fluctuations, however, an improvement by 0.5 percentage points compared to previous quarter.

Selling expenses for the quarter rose from SEK 63 million to SEK 75 million, reflecting ongoing investments in sales and marketing in the U.S., as previously announced. The market contribution margin for the quarter was 29%, representing an improvement of 3.7 percentage points compared to previous quarter.

Sales in EMEA declined by 3% in local currencies and by 8% in SEK, totaling SEK 326 million. The sales were negatively impacted by currency of minus 5%. Excluding discontinued business, sales increased by 5% in local currencies. Gross income was SEK 195 million with a gross margin of 59.9% compared to SEK 250 million and a margin of 60.5% last year. The decrease was mainly due to currency effects and product mix.

Selling expenses decreased from SEK 90 million to SEK 81 million. The market contribution margin for the quarter was 35%, slightly down from 31.5% affected by currency fluctuation, product mix and lower selling expenses.

In APAC, amount -- the sales amounted to SEK 250 million, reflecting a flat organic growth in local currencies, but an 8% decrease in SEK primarily due to minus 7% currency impact. Gross income was SEK 150 million with a gross margin of 59.8%, which is lower than previous year's gross income of SEK 169 million and a gross margin of 61.6%. However, there was an improvement of 1.5 percentage points compared to the previous quarter. Selling expenses increased from SEK 42 million to SEK 47 million and the market contribution margin for the quarter was 41%, down from 46.7% last year.

Let's move on to Slide #11. On this slide, I will comment on Q2 financial highlights. As earlier mentioned, the sales amounted to SEK 871 million, compared to previous year with the sales of SEK 941 million corresponding to a flat growth in local currencies, a 7% decrease in SEK and 3% in local currencies, excluding discontinued business.

As part of our ongoing risk assessment procedure and to ensure we continue to comply with all applicable international sanctions, we decided to discontinue activities in certain markets in EMEA as we announced in the Q4 2024 report, representing less than 3% of our annual revenue effect from first of January 2025.

The gross income amounted to SEK 505 million compared to SEK 564 million previous year, corresponding to a gross margin of 58%, down from 59.9% previous year, negatively impacted by currency fluctuations and slightly increased supply chain.

In the second quarter, operating expenses increased primarily attributable to the previously communicated investment in expanding sales and marketing capabilities in the U.S. as well as increased administrative expenses driven by ongoing activities within the company, and part of it is to be considered as one-off costs.

Operating expenses were also impacted by minus SEK 5 million when regulating assets and liabilities at the closing rate by the end of the quarter.

All in all, this gives us an EBITDA of SEK 243 million compared to SEK 327 million previous year, which consequently gives on an EBITDA margin of 27.8% compared to 34.7% last year. The decrease in margin is heavily impacted by transaction and translation effects, driven by a strengthened SEK against other currencies.

Furthermore, the margin was also affected by increased selling expenses mainly in U.S., combined with the impact of product and market mix.

Let's move to Slide #12. Some comments about our operating expenses. As previously communicated, we continue to invest in sales and marketing capabilities in key markets, resulting in an increase in selling expenses from SEK 196 million to SEK 203 million. R&D expenses have risen slightly year-over-year by SEK 2 million. Administrative expenses are higher and related to ongoing activities within the company and part of it to be considered as one-off costs.

Other operating expenses totaled to SEK 6 million remaining flat compared to same quarter last year. However, the operating expenses are mainly affected by translation effects of minus SEK 5 million in the quarter versus minus SEK 3 million in the comparable quarter related to revaluation of assets and liabilities at the closing rate.

Let's move on to Slide #13. Let us now look at some key financials. Here, I will focus on the year-to-date numbers, and sales for the first half year amounted to SEK 1.7 billion, corresponding to a flat growth in local currencies, a decrease of 4% in SEK and a 3% decrease in local currencies, excluding discontinued business. The gross margins decreased from 58.6% to 57.7%, and the EBITDA amounted to SEK 500 million compared to SEK 600 million, corresponding to an EBITDA margin of 29.2% versus 33.6% previous year.

The decrease in margin is heavily impacted by transactional translational currency effects, driven by strengthened SEK against other currencies, but the margin was also affected by increased selling expenses mainly in U.S. and the product and market needs.

The financial net amounted to minus SEK 15 million compared to minus SEK 48 million previous year, primarily positively impacted by foreign exchange gain by SEK 8 million compared to minus SEK 4 million previous year. Interest expense amounted to SEK 31 million compared to SEK 48 million previous year. Net income amounted to SEK 198 million compared to SEK 258 million previous year, heavily impacted by currency fluctuations, which gives earnings per share of SEK 0.74 compared to SEK 1.06 previous year.

Taxes amounted to minus SEK 73 million compared to minus SEK 77 million previous year, and the effective tax rate was 26.9% for the first half year compared to 23% same period previous year. The increase this year is driven by restructuring activities with holding taxes and geographical market mix, main part effective in Q1 2025. Historically, the normalized average tax rate amounts to approximately 23% to 25%, depending on the geographical market mix.

Operating cash flow amounted to SEK 220 million for the first half year compared to SEK 434 million previous year. Changes in the working capital had a negative effect of SEK 134 million this year compared to SEK 62 million previous year, affecting all working capital items. The tax paid with a year-over-year increase of SEK 81 million is a timing matter. And we have a strong balance sheet with an equity ratio of 78.8% and the net debt to EBITDA 0.8x compared to 1.0x previous year by the end of the quarter.

And additionally, in the beginning of July, we also have signed a EUR 300 million loan agreement consisting of the term loan to refinance the existing debt and a revolving facility for general corporate purposes.

And now I will now hand over to you again, Bronwyn.

Thank you, Helena. So the focus for the rest of the year. Well, growth. Number one is to continue to drive share gain in key markets, leveraging the full breadth of the portfolio. I think particularly on the Consumables side, we've been doing this really well for several quarters now.

Second imperative is to accelerate penetration of our combined EmbryoScope and lab controlled solutions. At the recent ESHRE Congress, we showcased new additional features on our lab control and also the integration of EmbryoScope and our eWitness, which was very well received by our customers. And then very important to deliver best-in-class quality and customer service, both of which are synonymous with our company and help to differentiate us from our competitors.

In relation to innovation, we have prioritized those programs that deliver solutions to help clinics automate scale and improve outcomes. So essentially, what we're doing is prioritizing the platform-related R&D programs. And we've also strengthened our market access capabilities, particularly to help us with some of the U.S. approvals.

In relation to operational excellence, I guess the key point I would like to highlight here is automating our manufacturing to increase capacity of key growth drivers. This has been really critical to meet the demand forecast in our Consumables business, in particular, where we have been gaining share for several quarters across the portfolio.

And then in relation to the macroeconomic environment, well, it's clearly quite volatile. Additionally, we need to stay very close to the evolving situation with tariffs and the U.S. IVF executive order in the U.S. We can clearly see that a majority of patients have postponed, not canceled, have postponed their IVF treatments in the U.S. There's only so long that you can do this for because the window for successful IVF is very small.

So I guess we will see as the months progress. Well, first of all, how soon we can get an update from the U.S. administration and then for how much longer are patients going to postpone. And then I think very importantly as well for our EMEA region, our largest region, which is performing very well, is to be ready to rescale activities in the Middle East in the event that certain markets reopen there.

So with that, I'd like to thank you for your attention, and we'll now hand over to the moderator to open up for Q&A.

[Operator Instructions]

The next question comes from Ulrik Trattner from DNB Carnegie.

My question would be on your impression on the underlying growth for respective markets in Q2, both mainly for EMEA and Americas and potentially specifically for the U.S. And what is driving your market share gains in EMEA Consumables as well as in Americas Genetics?

Yes. So thank you for the question, Ulrik. I think part 1 is what do I think the underlying growth is in EMEA and Americas, correct?

Yes. Yes, that's correct.

Yes. So cycles are down. Cycles are down in the U.S. But of course, for us, Americas is U.S., Canada and South America. but cycles specifically in the U.S. are down versus the previous quarter. So Q1, they were tracking healthily, I would say. And they are down versus Q1 and down versus last year. It's not canceling of cycles per se, it's postponement. I mean, obviously, that statement came out from the White House on the 18th of February. It was a very strong statement. IVF is expensive in the U.S. so you can completely understand why patients would pause.

So cycles are down, which to me highlights that our Consumables performance and our Genetics performance more specifically in North America is very strong. That's down to share gains. We've been taking share in Genetic services, not genomics so much, but in Genetic services in North America for several quarters now. And that really drove the growth in the Americas region.

EMEA, cycles are positive. So cycles are growing, but they're not growing to the level of our consumables games. And really where we're taking share is it's across the Consumables portfolio, Ulrik. As you know, we have been taking share on the media side for quite a while, but we're now taking share in other parts of the consumables portfolio.

So disposable devices, pipettes, needles, basically everywhere. I mean, to have the growth of 17%, excluding discontinued business is significantly double digit above what the cycle growth are in the region. So hopefully, I've answered your question the way you intended us.

Yes, absolutely. And just a follow-up question on Genetics in the U.S. What specific tests are driving growth? And I also note that you've submitted sort of dismissal of the class action suit, the PGTA class action suit during June. So first question then would be a follow-up would be which tests are driving growth? Secondly, have you seen any material impact from this on PGTA sales for the U.S. isolated?

Yes. So I can answer the second part first because it makes the first part easier. There's no impact because the PGTA family of tests is what's driving the growth. That's -- it's the largest part of the revenue, and it's driving the growth. So it's significant. And that's -- I mean, if we look at our 12-month rolling by test, obviously, we don't divulge this information. I'm sure we have plenty of competitors listening in this morning. So we don't divulge that by test. But it is the largest part of the revenue in North America and it's performing well and it has not been impacted in any shape or form by the class actions.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

Yes. A question on the cycle growth in the U.S. during the quarter. Can you comment anything about if there were any differences sort of in the start of the quarter compared to the end of the quarter, if the growth rate picked up by the end of the quarter or if it's similar growth month-over-month?

Yes. So excellent question, Sten. Thank you. The cycle got slightly better as the quarter advanced. So the biggest drop was at the start of the quarter. It was a little bit less in April -- sorry, April, May, June. Essentially, April was bad. May, a little bit less bad and then slightly better in June. So it would appear I never like guessing when it comes to this executive order, to be honest. But it would appear based on our data that patients had waited the 90 days, then when they saw that nothing was coming out. Obviously, the big beautiful bill was going through the house, and that was the focus of the administration. But I think as patients saw that there was no update coming on the IVF executive order, they slowly started to return to the clinics. Yes. So the phasing was...

Excellent.

Yes. You're welcome.

And then if I may squeeze in some sort of a follow-up there, but sort of on the broader growth for the company, it's been relatively muted now for the first half. And what do you see near term for the coming 2 quarters in terms of do you expect growth to improve? Or do you -- can you give any guidance on the outlook for the second half? That would be helpful.

Yes. So typically, we don't guide, but I'll try to give you my -- based on what we see, it's quite region-specific, Sten. So EMEA is looking very solid actually. So that's looking good. Europe across the Board is looking pretty good. And for us as a company, I don't know what it's like for our competitors, but for us as a company, we're performing well in all markets, the exception of the Middle East, which we all know the reasons why that has been impacted.

Asia is very much a mixed bag. So cycles have not recovered in China. They're not -- they're better than the levels that they were at in quarter 1, but they have not returned to pre-dragon levels. So China is looking soft. Southeast Asia is looking a lot better. So a little bit of a mixed bag in APAC. And then the biggest question is obviously the Americas because North America is the largest part of that market by quite a distance. Cycles have been trending very nicely. It's the largest IVF market in the world, and it also had -- in the context of being a large market, it also had prior to the executive order being signed, one of the healthiest growth rates globally.

So the postponement or, I guess, the delay in providing clarity to couples on what that additional financial support will mean that's making it very difficult to make a call on North American growth. What we do know for sure is that there's pent-up demand because speaking to our clinics and to the clinic chains, but also to some of the smaller clinics, they're not seeing patients canceling cycles. They're seeing them postpone them, which is completely understandable. I mean, IVF is very expensive in the United States and a financial assistance is going to go a long way.

So in many ways, in relation to the U.S., if we could just get clarity either way, it would be good for growth. Either financial assistance is coming, that's fantastic or financial assistance is not coming and we can get back to the healthy growth rates that we've had in the market for several years. So it really depends by regions then. The sooner we get clarity in the United States, the faster -- the sooner we can get the growth up.

The next question comes from Jakob Lembke from SEB.

A question on technologies. So in Q2 here, you talked about a bit of a weaker quarter in APAC. Americas seems to be more of a stronger quarter. So just in general, what is your outlook and sort of how is the pipeline for technologies here in the coming quarters across the regions?

Yes. So thank you for your question, Jakob. So the pipeline is good. I mean, even in APAC, the pipeline is pretty good for EmbryoScopes. But we are seeing -- again, I'm going to take you through the 3 regions because the dynamics are quite different by region. So in APAC, good funnel, very good funnel even in the markets where cycles are -- haven't recovered to historic levels, but we're seeing continued delays in capital purchases. So again, it's not like the EmbryoScope orders are being canceled. It's delaying as clinic chains and individual clinics, I guess, hold on to their cash in volatile times.

EMEA is our most penetrated region for EmbryoScope, but EmbryoScope has been performing well there. And I guess the other thing we need to think about here, Jakob, is the consumable revenue per EmbryoScope. We don't divulge exactly what that is, but it's becoming a healthier proportion, and that's trending very nicely in EMEA.

And then in Americas, we've really been focusing on EmbryoScope. We've been getting some very nice traction there. The funnel has been building. But again, there, we have a little bit of a holding pattern, less than APAC, it has to be said. We have a little bit of a holding pattern on technologies just with the whole executive order, I guess, sort of impacting confidence a little bit. But the funnel overall for EmbryoScope is healthy. It's the timing of when the systems come in. And we do see the time to order, which we measure, the time to order is taking longer. It's increasing. But Consumables revenue per EmbryoScope across the globe is increasing nicely. So hopefully, that gives you a bit of a flavor, Jakob.

Yes. And just on APAC then, when do you think this sort of caution from the clinics will move away and they can start to execute their orders?

Yes. It depends on the markets in APAC. So I mean, if we just take China as an example, as I mentioned, cycles haven't returned to sort of historic or pre-dragon levels. And I guess the clinics in general, would like to see -- there are some green -- we have seen some green shoots, nothing to get too excited about.

But I guess the clinics are waiting for a little bit more confidence on the cycle side. I mean, reimbursement has been improved. It hasn't had an impact yet. Are governments going to become more aggressive on the reimbursement side? We look what's happened in South Korea. The government has gone very aggressive on financial support, and it has helped the Chinas and Japans of this world are likely going to have to do the same if they really want to move the needle. So all of that sort of helps confidence in investing in an EmbryoScope. And then, Jakob, was there a second part to your second question that I missed? Or have I clarified?

No, you clarified. Maybe if I can just shoot in a more general question before getting back in line. So I guess 2025 has been a sort of tougher year for many of your key markets. But when you now look into 2026, what are you seeing there? And also, do you think it's possible to get back to your sort of growth target of 10% in next year?

Yes. So again, it comes back to the 3-part story. We think EMEA is good and steady, particularly Europe. Europe is better than good and steady. That's for the Vitrolife Group. We're doing very well in EMEA. If financial support comes in the U.S., then we will see an uptick in cycles. That would be expected. It won't be explosive because the capacity is not in the system right now. It would take time for that to filter through.

But any financial support in U.S. will help the Americas region. I guess where I would be more cautious is on APAC because we do have several large markets there. When I say large, I mean large in absolute numbers of IVF cycles. And we see that despite improved reimbursement, the cycles quarter-over-quarter, you can have snake dragons and all these sorts of things. But if you look at the rolling 12-, 24-month cycles, it's not very exciting.

So APAC seems to have more endemic challenges, one of which is the cost of raising, the overall cost of raising a child. And I think that's why you're starting to see some of the government step in. So I think, again, EMEA steady, more optimistic for Americas, but more conservative outlook for APAC.

The next question comes from Johan Unnerus from Redeye.

The first one and second follow-up then. On the U.S. side, clearly, the consumers or the clients are hesitant and postponing. Is there an element of that the administration budget uncertainty also affect the clinics in terms of activity and perhaps encouraging patients to go further?

I'm sorry, Johan, I'm struggling to hear you a little bit. So I think your question and correct -- maybe could you repeat the question?

Let's see. I can change perhaps go directly. Maybe my iPhone was great. Yes. Is that better?

Yes. That's much better.

I'm just -- sorry for the confusion. Now it seals it doesn't pop over automatically. Yes. No, your message regarding U.S. in terms of patient behavior is pretty clear. It seems to be that a lot of patients are postponing and not canceling. But what in terms of -- there is, of course, changes, of course, in budgets and administration. Is that having an impact perhaps in how the centers are incentivizing their patients to go further? There could be an element of that as well, I suspect.

Yes. We're not the industry, not Vitrolife Group. So reproductive health as a whole isn't so impacted by some of the central government cuts or cuts to things like NIH funding. I mean, we're not completely immune to it. But I mean, most of the clinics in the United States are part of a chain, 60%, and most of those chains are privately owned. There are some, for sure, there are some clinics that are linked to academic centers, the Columbias and Cornells of this world.

But so far, the sort of funding on that reproductive health side hasn't been impacted. I mean the administration has been pretty clear, not just President Trump, but just the wider administration has been very clear that they want Americans having more babies. And they're very pro providing support for couples to do that or for individuals to do that. So we haven't -- to date, I couldn't say we've been impacted by that in any material way. Yes.

Great. I have a similar question related to APAC then.

Go ahead, Johan. No, I was going to -- I was going to say [indiscernible] health care, which would be significantly impacted, but not really our space. Yes.

Yes. And in the APAC region, the sort of more regional approach doesn't seem to work very well or at least its causing friction to put it mildly. At the same time, the reimbursement seems to improve. What should we expect here? Should we expect more reimbursement to try to kick start the market from central perspective? Or should we expect the regional approach to be -- start to be back tracked to some extent.

Yes. Difficult to predict, but I think the green shoots that we're seeing in countries like Korea, where the decline has halted and from a very low base, it has to be said. But I think that's going to become a proxy for how aggressive governments are going to go. And what I would say is what we're hearing much more of in APAC is not just IVF reimbursement and coverage, but improved support for the cost of raising the child. So things like tax breaks or payments for having children.

So I think where we're going to see more support is on the sort of additional cost of raising a child as well as reimbursement costs for IVF. Are they going to do this or are they not? I don't think they're going to have any choice if you look at the declining birth rates. I mean this is only going in one direction. So the biggest factor here is people are having less children. They're delaying having the children that they do have, which means they inevitably or a lot of them are going to need IVF support. And population decline is very stark now globally. There was a recent UN report published in April.

So governments will have no choice but to step in. I don't see them standing by and watching their populations fall off a cliff. So APAC in general, Asia, in general, is going to have to get more aggressive on helping couples in the case of APAC to have a child and child raising costs.

That, of course, sounds very realistic and likely, but indirect incentives and support may, of course, take some time to get traction and go through parliament and the like.

Yes, exactly. No, I think you're right. I think in the shorter term, that's going to take time, for sure.

The next question comes from Ludvig Lundgren from Nordea.

So two questions for me on costs. OpEx to sales was 42% here in Q2, the highest level in quite a while for Vitrolife. I wonder if there was any sort of one-off costs in the quarter and how we should think about OpEx sales moving into H2?

Yes, Helena?

Yes. As we said earlier, there are ongoing activities within the company that has actually increased the cost for this quarter and part of it is considered to be one-off costs of it. Some of it will continue, but part of it will be one-off for this quarter.

Okay. And then on the FX side, I suppose that has also affected margins quite a bit here in Q2. So I wonder if you could share the organic OpEx growth for the group in Q2?

As I said also earlier, it has been offsetting a little bit of the costs in it, but the major part is on the gross income part. So we have still quite a major part in Swedish krone in our OpEx.

The next question comes from Suzanna Queckbörner from SHB.

I just wanted to follow up on Ludvig's question. So regarding the margin declines that we saw in the Q2 report, should we think of that as a one-off? Or is it fair to continue assuming the financial targets in terms of the EBITDA?

And then as a follow-up question, I wanted to just sort of get a better grasp of Japan because historically, their contribution in APAC and specifically the benefits that you've seen in sales as a consequence of reimbursement. So maybe you can give us a little bit of granularity on that?

Yes. So I'll hand over to Helena to take your first question, and I'll take your Japan one if that's the case, Suzanna. Thank you for your questions.

Thank you, Suzanna as well, and the margin then, it is part of it is coming from the currency, as we have already mentioned, but also some of it now tariffs coming into play. It's not a major cost, but it is coming in our cost for supply chain here during Q2. So -- and as you know, that is still on the pace going forward as well. And then we have also some minor effects from product mix and one-offs also in the margin.

Okay. Yes, Japan, Suzanna, that is an interesting one. And it's nice to get a question about Japan. So Japan, very large IVF market, really good or comparatively good reimbursement system and the reimbursement system has been gradually improving and including things like wider genetic testing. So what we see in Japan is we see some signs of pickup on the consumable side of the portfolio, which is good. What I can't give you is a breakdown of how much of that is coming from cycle growth and how much of it is coming from share gain.

But we estimate internally that our Japan consumable growth is coming from -- mainly coming from share gain. But it's good to see what I would say is Japan is also impacted by the delaying on the capital purchases. So that's not just -- it's across APAC, even in the markets that are showing some green shoots like South Korea and Japan. But you're correct. It's a sizable market. It has good reimbursement I think in fairness to the Ministry of Health in Japan, they are increasingly trying to find ways to support couples on the reimbursement and on the financial side, and maybe some of those green shoots are starting to come through. Yes. So hopefully, that answers your question, Suzanna.

The next question comes from Ulrik Trattner from DNB Carnegie.

And also on the OpEx side, I understand the rationale behind you increasing your selling expenses, especially in Americas. However, admin expenses up more than 10% year-over-year and you referred to ongoing activities. What are these ongoing activities? And I think, Helena, you mentioned that there would be some one-off in these. If you can explain what these one-offs are, that would be very helpful?

Kind of one-off is more that we have working with the legal support here in -- relating to the class action lawsuit in U.S. as well as we have some costs as well in relation to insurances connected to this as well in U.S.

Great. And what is the ongoing activities that would sort of make up rest of this?

Yes. I would say that it is -- the major part of it is really one-offs in the quarter, but some of it will continue. That is...

Okay. But right, we should see it as these ongoing activities and one-offs being mostly related to the class action lawsuit in the U.S. on different cost posts.

Yes. What I would say, Ulrik is -- sorry, Helena, to jump in, in your turf. But we've been very tightly controlling everything from headcount, T&E costs. I mean, obviously, that's the responsible thing to do. So it's not a sort of a blow up in any areas, but a couple of small items. I think Helena is correct. It's not the majority, but a significant proportion of it in this quarter comes from defense costs for the PGTA legal action, which you can see is starting to advance slowly and then insurance costs related to the PGTA class action. So that's maybe not the majority of it, but a significant proportion of that. Some of that is one-off, not all of it, but some of it is one-off costs. So for example, on a specific legal defense, that's going to be one-off. On insurance, that tends to be a little bit longer term. So hopefully, that's a little bit more clarity for you on that one.

Yes. Absolutely.

Yes. But not like we have any particular line that's sort of blowing up. We've been in tight.

On top of it.

Yes, it has been very much on top of the cost. So yes.

That's great. Thanks for the granularity. And some -- an additional question here on my end, and I'll get back. It's on the discontinued markets. If there's any -- do you estimate any sort of dramatic changes in H2 versus H1 in terms of those markets contribution to both top line and bottom line? Or it just kind of the same?

Yes. So the biggest impact from the discontinued business was in this quarter. This was the biggest one actually in EMEA. Then we get back more back into the range that Helena talked about, which was 3.2%. So it doesn't get lumpier, Ulrik, as the quarters advance.

Yes, this is the biggest one. This was the strongest quarter in that market in 2024. So it gave our EMEA additional headwind this quarter, yes. Maybe your backup question because I know how you think -- well, I know partially how you think. Do we see additional activity in countries close to that discontinued market? No, we don't. We don't see that. So yes.

That's great. And the same on profitability as well, not only top line, I guess. Sorry, did you catch my last follow-up there?

No, I think we was disconnected. So please...

Did you have another question, Ulrik.

Okay. No, that was just a clarification that it was not...Yes, yes, sorry. It was just a clarification that it was not only on the strongest on top line, but also on bottom line in this continuing market.

Yes, exactly. So this quarter was strongest on top and bottom. And it gets to more...

Great.

Yes. And it gets to more normalized discontinued levels in Q3 and Q4. This was the quarter where it had the greatest negative impact, I guess, is the simplest way to put it. Yes.

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

So I would just like to thank you all for your time this morning. Thank you for your questions, and I wish you all a very nice summer vacation on behalf of myself and Helena. [Foreign Language].