Good morning, everyone, and welcome to Medistim's Fourth Quarter and the Full Year 2024 Preliminary Financial Results. My name is Kari Krogstad, and together with my good colleague, CFO Thomas Jakobsen, we will take you through the results. First of all, I would like to remind everybody that Medistim's goal and ambition remains to deliver profitable growth consistently over time. Our track record shows that we have succeeded to deliver on this promise over the years. Let's move into the fourth quarter. I am very pleased to be able to report an all-time high sales fourth quarter, ending at NOK 151.1 million. That is an 11.4% increase over the same quarter last year. As we can see here, the currency effect is quite modest, and that means that the currency neutral sales is also close to 10%.
We can see that our third-party products are up 10% as well, meaning that we have good performance also from our own product sales, also close to 10%. I would particularly point to Americas, which is really continuing the great development that we've seen through 2024. Last quarter, we had a 17% currency neutral growth from Americas. Now it's close to 30%. Also, EMEA is keeping the pace for the year with almost 11% growth for this quarter, while Asia-Pacific continues to be down this quarter at 24%. Looking at the EBIT, ending at NOK 25.8 million, that is a 16% growth over the same quarter last year. Still, the margin is on the lower side at 17.1%, and this is very much driven by an extremely high activity level in the fourth quarter. We did launch the new INTUI software with several launch events and projects connected to that launch.
We also arranged the European cardiac meeting with the distributor meetings and other events in Lisbon this quarter. We sponsored the International Coronary Congress meeting in London and had also a big presence there. We arranged a Capital Markets Day in London, and we also had some expenses now coming in from the patent study. When we then move on to looking at 2024 as a whole, we are reporting NOK 562.6 million in revenues, so that is a 6.9% increase. Currency effect is again quite modest, meaning that the currency neutral sales development is at 5.4%. The third-party product portfolio has really performed extremely well all through the year, ending at 13% growth. We are still seeing then a softer development in our own product sales, ending at 3.9%.
However, I'm very happy to see double-digit growth from the Americas, which is really back where we want to see it. Also, I feel EMEA is delivering very impressive 8% growth for the year. Asia-Pacific, as we have seen, continues to be down for the year. It's actually a bigger contribution or effect of softness in Japan and not so much related to the transition that we have gone through in China, where we have gone from a distributor-supported sales model to a direct presence in China. Looking at the EBIT, we are ending at NOK 131 million, so that is the same level as last year. That, of course, takes the margin down to 23.3%, a little bit softer than the previous year.
To summarize this, while the Americas and the EMEA show really solid sales development, it is the APAC sales challenges, or the decline in the sales in APAC, that is challenging our margin. That creates this effect since we are continuing to invest in our business. We do have higher operating expenses now from this direct market, China, Canada, and Sweden. We have, over time, strengthened our R&D and product innovation teams. We have been launching the INTUI software, in particular with high expenses in the fourth quarter, and we are also investing in clinical marketing studies. In summary, Medistim continues to deliver profitable growth, showing solid cash flow, and also has an optimistic outlook for 2025. The board of directors are suggesting a dividend of NOK 6 per share. With that introduction, I will leave the word to Thomas.
Thank you, Kari. Good morning, everyone. I will go straight to the P&L and our numbers. As usual, Kari will take us through sales figures in regions and product splits. I will not go into that detail when I go through the P&L. To explain the change in gross margin, that means cost of material and cost of goods, we have a margin improvement of 3%. The reason for that is that we increase more on our own product sales versus third party, even though third party is also on the double-digit end. Third party is only 15% of the total revenue, and therefore we get an improved margin when 85% of sales is with a better gross margin, and therefore the percentage increase in gross profit. Salary and social expenses increases. Kari mentioned Americas up 30%.
Of course, with this growth in sales, commissions to sales reps increases. We also have more employees in this quarter compared to last quarter, so that adds to expenses. Last but not least, general adjustments in salaries explains the increase in the fourth quarter versus third, fourth quarter last year. Kari mentioned the high activity level when it comes to other operating expenses. I do not need to repeat that other than I would just like to add, and Kari will talk more about this later on with the change in the commercial operations. With this change, we also had one-off recruitment expenses. EBITDA ends up with NOK 3 million for the quarter. Depreciation is down NOK 500,000, and obviously some assets are fully depreciated. Operating profit up 16% or NOK 3.5 million. Net finance positive with NOK 2.5 million.
That leaves us with a pre-tax profit of NOK 28.3 million and profit after tax up 11%, ends at NOK 21.3 million, which is the same top line growth, 11%. For the year, when it comes to the margin, kind of the same explanation, although third-party products increases with 13% for the year. Our own products in NOK increases 5.8%. Since third party is a smaller portion of the total, we are able to improve margin by a percentage point. Salary and social expenses, the direct initiatives in Sweden, Canada, China increases expenses, but also we have an effect actually of the introduction of double shift in pro production. We initiated that in 2023, so we had expenses related to it, but it was not fully operational with all the new employees to the second shift before the beginning of the third quarter. Therefore we have a full year effect of that.
All of these things also explains why other operating expenses increases in addition to what's already been mentioned for the fourth quarter. EBITDA ends up, you know, NOK 400,000 for the year, so it's more or less on the same level as last year. We have a slightly higher depreciation expenses compared to 2023, and operating profit ends NOK 400,000 below last year or more or less the same, NOK 131 million or NOK 0.1 million. An EBIT margin, which is slightly down from 25% to 23.3%. Net finance is posted by NOK 3.2 million. Financial income is basically interest rate, but also gains, realized and unrealized gains on foreign exchange. Net, or sorry, financial expenses is only related to realized or unrealized losses on foreign exchange. Pretax profit ends at NOK 134.2 million and profit after tax, same as last year, NOK 103.8 million. If we look at the balance sheet, intangible assets increases.
There are two reasons for that. We had two major development projects. One is the INTUI software project, which we will talk more about later, but also the project related to increase efficiency within production. Fixed assets increases. This is related to an extended lease at the main office with five years. Inventory levels are increasing and higher than what it was by the end of last year. However, we're down from the peak we had by the end of the second quarter. In the second quarter, we ended at NOK 164 million. Now we're down at NOK 160.5 million. Although revenue increases, customer receivables are reduced. That means we have a good and effective cash collection. As you can see, solid cash position ends at NOK 179.2 million by the end of the year, which is an improvement from last year's NOK 153.8 million.
Strong equity increases from NOK 398 million to NOK 436.6 million. The increased long-term liability is related to what I just mentioned when it comes to fixed assets, and that's the added lease obligation related to head offices here in Oslo. Some key figures. Earnings per share increases this quarter since we have a better profit for this quarter compared to last year. However, for the year, we end at the same level, NOK 5.67 per share. The change in equity and the reduction in equity, although we are increasing in value, we do have an increased total balance sheet, and there are three major reasons for that. One is the development projects that we went through when we looked at the balance sheet and also the increased lease obligations and also increased inventory levels. Cash flow, solid cash flow, cash from operation increases from NOK 115 million to NOK 141.5 million.
Cash from investments is related to our product development. NOK 18.6 million is related to that, and another NOK 4 million is related to outplacement of systems in the USA, the so-called lease or PPP solution. Cash flow from financial activities, NOK 82 million is related to dividend, and the rest is cash from lease activities. All in all, very solid cash position. We end at NOK 179.2 million, which is very comfortable for a CFO. Thank you very much. With that, I leave the word to Kari.
Okay, we will dig into the various aspects of the business, starting with looking at the development of our flow and imaging systems in units. We can see here that we have a softer quarter going down from the fourth quarter last year, five less units sold, but Americas is up by two units, which is encouraging. EMEA is also up by four units, and we see that it is Asia-Pacific that is taking this down this quarter, much related to weaker imaging sales to Japan. For the year, it is also Asia-Pacific that is driving the number of imaging systems down. It is interesting to see that we see a somewhat upward trend in imaging probes sales over the past four quarters. America is up by five units this quarter. EMEA is also up by four units. Again, Asia-Pacific is down.
The increase here is also speaking to utilization of the imaging technology out there. Looking at our flow-only systems in units, this is at the same level as fourth quarter last year. Yeah, it's indicating some recovery from past quarters. America is up four units, while both EMEA and Asia-Pacific is a bit down for this quarter. For the year, it's again Asia-Pacific that is driving the number of imaging systems down. Flow probes in units, for the quarter, it's a modest 1.6% growth, but looking at the year in full, it's actually 5.6% growth. This is coming despite we see a lower unit sales of systems. That really speaks to robust utilization amongst the current users and customers. Again, very happy to see significant uptake in the Americas by 23%, while the other regions for the quarter is a little bit down.
Going further into the territories here, Americas, NOK 61.7 million in sales in the fourth quarter, NOK 237.2 million for the year. Currency neutral, up almost 30% for the quarter and about 10% for the year. This is a performance that we like to see from our biggest growth contributor. It is also encouraging to know that both Canada and Latin America, which are smaller parts of Americas, but they are still both contributing very positively to the overall result. Looking a little bit closer into the performance in the USA in isolation. We see for the quarter significant improvements in capital sales of systems, both for the quarter and for the year. This is something that we have seen been quite weak through 2023 and also in the beginning of this year.
We have attributed this tendency as a consequence of what we call the macroeconomic headwinds with high inflation and so on and a more conservative approach to purchasing new technologies. If we look at the number of procedures, we do see that the total number of procedures sold is flat for the quarter and for the year. The flow procedures from capital accounts are growing for the quarter at 6.6% and for the year at 5.6%. This is very promising and is, of course, related to the increase in capital sales as well. We can see that the number of procedures coming from our PPP or lease accounts is going down. It does not necessarily mean that we are losing customers. New customers, they tend to be capital accounts. That is one factor.
We also see that some of our current PPP and lease customers tend to convert to capital when their agreements expire. For the quarter, we also see good growth in number of new customers, 10, and also 26 new customers for the full year. A very positive development from the USA. Asia-Pacific, as mentioned several times now, is weaker than we saw in the same period last year, both for the quarter and for the year. As we have mentioned several times now, the growth for the year has been challenged quarter by quarter from exceptionally high system sales to our distributor for China prior to Medistim going direct in the second quarter in 2023. This has been a significant effect. We have seen that this effect is becoming smaller and smaller and that is very promising.
We have much better visibility, of course, into the inventory states at our local distributors and are looking now forward into 2025 with optimism. When it comes to Japan, we have seen very weak sales to the distributor in Japan for the year. While we cannot identify any less interest from Japanese customers or any particular trends that can explain this, we are actively collaborating with our distributors here to really understand market dynamics. Of course, we are evaluating strategies to optimize the business there. We will continue to report back what is happening in Japan. EMEA has had a very strong year. Revenues up 10.9% for the quarter, 8% for the year. It is also very encouraging to see that this growth is coming from our direct markets, especially Spain and Germany, and also Sweden has had a great year.
In total, they have shown a growth of almost 20% for the year. Our third-party products sold in Norway, Sweden, and Denmark also have had a very strong year, ending at 13% growth. This is a highly diversified product portfolio with some larger agencies that is contributing a lot, but very good performance from most parts of this portfolio. This summarizes the regional performance revenue. Here, I just want to point to the quarterly development in China because this is our own organization, our direct operation in China for the quarter delivered NOK 14.2 million in sales. That is close to NOK 16.7 million that was delivered last year. I can mention that there was some minimum commitment from the local distributors in China, which was also contributing last year. This just shows that the performance from our local team is absolutely decent and promising going forward.
When it comes to Japan, as I said, it's been weak and 49.7% down for the year says all about that. At the same time, we're seeing some type of recovery in the fourth quarter. We mentioned this in the third quarter as well, that we had reports on a stronger pipeline or project for the fourth quarter. Japan is then delivering closer to a normal performance. It will be very interesting to see how this develops going forward. Looking at the split between cardiac products and vascular products, we see that the vascular growth is very low for the quarter, but ends at 15% for the year. Now the vascular portfolio makes up 19% of the total sales of own products. Steadily growing the portion of vascular sales year by year.
When it comes to the split between flow and imaging products, as we will recall, imaging has really been growing very highly over several years, but had a setback in 2023 and also for the most part during 2024. This quarter, we are seeing a little bit of improvement with 10% growth in our imaging portfolio. Still, we are a little bit down for the year, but there is no, again, no signals from customers that the interest is decreasing. We do believe that the sales of this product will pick up as we are moving forward. We are keeping track of the contribution from sales of probes and PPP cards and lease agreements, what we call recurring revenues. For 2024, that ends at 73.7% of the total. I would like to provide some comments to our strategy and our recent activities to implement this strategy.
As you will recall, we have a strategy that is adapted to the various geographies and market conditions. Typically, in markets where we have very strong penetration with flow technology in CABG, our strategy is to focus a lot on converting that install base to imaging. In markets where we have lower penetration, it is very much about marketing and also product innovation for ease of use to really get new potential customers and users intrigued by the technology and really wanting to get on board. In emerging high-growth economies with more price sensitivity, we also want to be flexible when it comes to pricing. I have also developed a specific solution of our technology to fit better. This is also part of our strategy. In vascular, for all around the world, we want to build our position in the vascular surgery field.
Last but not least, as we are strengthening our position in many markets, we will continue to go direct in more countries going forward. Starting now with some comments around our activities for product innovation for ease of use. To explain a little bit also how we're thinking about product innovation, some years ago, we established what we call an external innovation team, which is a small team of engineers, innovators, which are working very closely with our customers and being responsible for proof of concept testing and piloting. This was arranged in order to have a much more rapid testing and avoid that we are putting, let's say, bad ideas into the formal product development process, which is much more both costly and more stringent. This is part of the reason why we have increased the OpEx also from R&D and from innovation.
Looking forward, innovation, well, we started as an innovator in the mid-1990s with launching the first flow meter, the CardioMed, and we have come out with several generations of the equipment since then. In 2010, we also launched high-frequency ultrasound imaging, which was really a new paradigm with the VeriQ C. The MiraQ took over in 2014, and we are developing the next generation. Going forward, we should all expect concentration on digital innovation. In December, we then launched the INTUI software platform. This is the first initiative of a number of projects that we're working on that will reach the market in the time to come. The INTUI, a new software platform, what is it?
It is both a response to users' requests, but it's also for Medistim internally to really revamp our software architecture for the product software and making sure that it's developed now on cutting-edge future-proof solutions. This is going to help us shorten the development time for next upgrades. Going back to the users' request, of course, we have had very intimate interactions and thought feedback from all our users from various initiatives over the years. They told us that although it is rather easy to learn the TTFM technique, still it is a need for a more intuitive user interface. They ask for simple navigation. As technology develops, of course, it's also relevant to ask for interpretation guidance. We would like to do that really sophisticated in the future.
At least in this version of the software, we are providing reference values so that the measurements that are shown on the screen are compared to what the surgeons in question believe are good values. We also provide some guidance there. The new software also provides context data, and that will help increase the quality of the utilization of the technology. It will help data analysis and also help the reporting and increase the value of the report coming out of the procedure. There are many benefits. So far, the feedback from surgeons that have taken a look at the new software is very, very positive. I just want to stress in INTUI that it is definitely a solution that will offer advanced support for clinical decision-making, but it is just the beginning.
Amongst other things, we are working on expanding this technology to vascular applications in the near future. The vascular surgery area, the strategy is to build a position there. We believe that one of the best ways to do that is actually to do a clinical project together with leaders in this field. In December, or actually in November, we were launching the patent study, which is a clinical study on flow and imaging in peripheral bypass surgery. Peripheral bypass surgery, that is a treatment to revascularize patients that have occlusions in the arteries in the lower limbs. We call this critical limb threatening ischemia, which is an advanced stage of peripheral artery disease. This is a very serious disease. It has a very negative prognosis.
We can see that within a year after the initial diagnosis, one-year amputation rates are approximately 12%, mortality at 50% at five years, 70% at ten years. That really speaks to the serious condition. While bypass surgery is a great treatment strategy, about 20% of these bypasses fail today. Very clearly, there is a need for improved intraoperative guidance and control. Here is where Medistim comes in and we can help. The timing for this project is really good because as in CABG surgery, also in vascular, endovascular treatments is the first choice. A recent study from 2022 has shown that open surgery may provide better results. There is a lot of interest and attention going into this procedure, not only peripheral bypass, but also other variants of vascular surgery at the moment.
The goal with the study is to detect technical issues with the graft and giving the surgeon the opportunity to correct this intraoperatively. While the patient is on the operating table, also to identify grafts with a high risk of failure and separate from grafts with lower failure risk. This is to detect the prognostic value. The design, this is going to be or is a prospective non-randomized. It's an international multicenter study, and it will enroll around 450 patients. The endpoints here, first of all, the primary endpoint is graft patency rate at one year. We're also going to follow the number of revisions or surgical changes based on the information from the flow and imaging technology. Very much like what we did in the request study for CABG.
As you can see here, also early graft failure rate, major adverse limb events, reinterventions, and amputation-free survival are secondary endpoints. Very important, we have absolutely the top thought leaders in this field participating in the investigator team. Professor Michael Conte is the lead investigator of the trial. He was the first author of the global guidelines for this procedure. We have the Secretary General from the European Society, Professor Maarit Venermo. We also have the President of the Japanese Society of Vascular Surgery, Professor Azuma. We have the first author of this trial that I just mentioned, which is so important, challenging the use of endovascular procedures only, Professor Alik Farber.
We also have two past presidents from the Society for Vascular Surgery in the United States, including Professor Mills, who was the president in 2024, and many other really influential surgeons as well as part of the investigator team. We do believe that the patent study has the potential to be a game changer for us in vascular surgery and in the vascular segment, very much like how the REQUEST study was transformative for the adoption of imaging in CABG. Finally, I would like to add some comments about some organizational developments that will support accelerated growth going forward. This is information that was disclosed in January.
We stated in our press release that with the launch of the INTUI software and also with the commencement of the patent study, which will support all of our activities in vascular surgery, this is really the perfect time to strengthen our commercial efforts. What we have done is to reorganize a little bit how we are approaching the commercial part of our business. We have appointed Mr. Mike Karim as Chief Commercial Officer, which is a very, very experienced person with many years of experience from the medical device segments, a lot from the cardiac and vascular side, and which is really bringing a lot of expertise into commercialization of products like ours. Extremely happy to have Mike Karim on board. We have also changed the leadership of our America's sales region, and we are introducing Mr.
Tony Winter as a new Vice President of this region. Our ambition is to enhance our commercial initiatives. We believe that with this organization, we are also enabling better collaboration, sharing of best practices across all regions. We believe this is going to be very important to deliver the growth that we are foreseeing. Medistim is ready for 2025. By that, I think we will open up for questions.
Yes, we have some questions coming in here. The first one is on Americas. It's great to see growth in Americas at more than 30% for the quarter. Do you expect the USA to continue to drive growth in the future?
Yes, I think, yeah, I pointed to, you know, it's very reassuring to see that the Americas and the U.S. in particular is coming back at higher growth.
Remembering that we had actually a decline in sales in the Americas every quarter in 2023, even in the first quarter this year. We have seen a gradual uptake of sales there, you know, starting from a modest 6%, then delivering a strong 17% in the third quarter and now close to 30% in the fourth quarter. We do believe that this is, you know, following sort of the reeve in the economy at large with at least more stability when it comes to inflation and interest rates and so on and so forth. That is what we are also hearing from the market, that, you know, that climate is improving.
I would also say that, you know, with the general changes that we're making to the commercial organization, I mean, to the benefit of all our regions, but also for the USA and their ambitions there, I think that will be greatly supported by this new organization that we have established. Yeah, the answer to that question is yes, I do believe Americas will contribute to good growth going forward.
Thank you. Then some questions on INTUI. INTUI was presented in December. When do you expect to start seeing an effect in sales? And does the software require FDA or European approval?
Yeah, we have the approvals that we need for the INTUI software. The regulatory issues will not be sort of a barrier for getting this software to the market.
Now, going forward, when we are selling systems, for the most part, those systems will be with INTUI inside. Those systems will be sold at the premium because we believe this is a valuable addition to the total technology. It really defends a price increase there. Of course, we will have some projects and some quotes that we have been working on for a long time on the, let's say, the legacy software, which will also continue to be sold. For some time period, we will have both versions of the software out there in the market.
In the second half of the year, we will also have developed what we call an upgrade kit for upgrading the install base on the MiraQ system so that we can go after those systems and customers and offer this upgrade kit to get them up to the best or to the latest software. That is another avenue for revenue generations from the INTUI launch. Of course, I think longer term, which is maybe even more important than the impact now in 2025, is really that the ease of use and the new features will make the whole solution more attractive. We are lowering the barrier of learning the system, to creating value from the system, to understand how they can really benefit from using the system. These are the most important features with the whole software.
Just have an extra question on INTUI. How is the revenue model for the INTUI software?
Yeah, so as I mentioned, it will be a premium price for this software or for systems with the INTUI software inside. We will also, of course, charge for the upgrade kits that will be sold separately as a separate type of product.
Thank you. It is a question on tariffs. Many businesses have been struck by certain tariffs lately. How will this affect Medistim with a big share of its sales coming from the U.S.?
Yes, that's mine, Kari. We hear about tariffs and from the U.S., obviously, 25%. As of now, we are not really sure whether that is for medical devices. That remains to be seen. When it comes to the pricing as such, we will then, you know, if it's a 25% tariff, we will clearly try to recover that by increasing our prices in the U.S., particularly. The fortunate thing, if this remains, is that we do have premises in the U.S. that is actually fit for system production. If this lasts, we could consider actually setting up a system production in our facilities in Minneapolis, then avoiding a lot of these additional tariffs.
Thank you. A question on dividend. Dividend in Medistim has historically been at a lower level than what is suggested by the board this year. Why this increase compared earlier? Would it not be wiser to reinvest some of these funds into product development, market expansion, and such?
Good question. Last year, ending 2023, we saw some uncertainties, and therefore we did not increase the dividend. We've tried historically to increase the dividend every year, but because of those uncertainties in 2023, we were more prudent and just set the dividend at the same level. Now, as we've seen earlier today, we have a very, very strong cash position ending when we go out of 2024. We have also for 2025, before we looked into the level of dividend, already made sure that we financed our activities going into 2025. We also have a good result this year. We also think that our outlook is good. Therefore, we are comfortable increasing the dividend from NOK 4.5 to NOK 6 per share. This will be NOK 110 million in payment. We have NOK 180 million ending 2024, and we think the outlook is positive. That's why we are able to pay this dividend.
Thank you. A more general question here. How does Medistim avoid the classic pitfall of prioritizing sales growth over long-term product development? What measures ensure the right balance between shorter metrics and maintaining technological leadership?
Kari?
I think that the changes we made to our approach to innovation shows that, you know, we have a very long-term perspective on this. And we, of course, have also many years of experience in developing products for this industry. We know very well about all the struggles and all the hardships that it takes to really both keep medical devices on the market and also to develop, launch, and get new products out there. I think it's a balance of supporting the business that you have today and ensuring that you are always able to sell. That means that you need to have an engineering team that is working closely with the operations and solving problems.
There will always be some issues out there in the market. It comes from technical issues, or there can be components going out of availability. There are engineering changes that come up as a solution to those, and that requires R&D resources. At the same time, you need to make sure that you are dedicating a portion of your R&D resources to only work with product development. That is exactly what we've done with this external innovation team. The small group, three headcounts that are in this team, they're not really allowed to work on anything operational. They are only allowed to be engaged with customers, do this prototyping and testing, and bring that back to the organization and the development engineers. I think that is one way of us approaching that balance.
Thank you. That's it. No more questions.
Okay, then we will thank everybody for the participation this morning and wish everybody a good day. Thank you.