All right. Well, welcome. This is Dan Schneider, President and CEO of FotoCure. With me today is Eric Dahl, CFO. And you are plugged into the FotoCure results for Q2 2021.
Next slide. Just reminded, disclaimers are in fact for today's presentation. Next slide. Top line second quarter highlights. We've had progress in both commercial regions despite the continued pandemic, COVID-nineteen.
We had 66% revenue growth In the Q2, that's 87% positive to constant currency. EBITDA of positive NOK 5 800,000. We also had 3 key study publications, one of them actually emanating from our own U. S. Registry, which is fantastic.
And partnership activities continue with Acerus dosing their first patient for Savira in Europe, part of its Phase 3 trial. And Genotest in Chile filed its MAA on a fast track review and expect more information as time goes on. Next slide. I'd like to give you a really quick COVID-nineteen update. Access restrictions continued due to the 3rd and 4th waves.
We're now entering into the Delta wave, unfortunately for the world. Access restrictions continued in most of the US, but large metropolitan Cities have started to ease off a little bit and we've gone after those businesses. In Europe, severe lockdowns and restrictions continued into Q2. However, there has been successful interactions in established markets, but does present unique challenges connecting with customers in relaunch markets going forward. The outlook for both regions pending the handling by the authorities of COVID-nineteen Delta surge, There'll be continued interruptions through the second half and is expected to impact the second half business.
Next slide. So Sysu HexFix revenue development through the COVID-nineteen pandemic has now spanned 5, Actually, 6 quarters now, and it will continue for a while, we believe. Despite the challenges, we're able to reacquire European business and Successfully launched in those territories last year and expand our global brand. Our U. S.
Business was up in 2020 and continues to grow in the first half this year, while we contained our cost to keep the business well capitalized. I'm actually very proud of this performance. The chart demonstrates the resiliency of the business, And we are well prepared to take the company to the next level as COVID-nineteen becomes less of a factor. Next slide. Next slide.
We'll talk about the segments. All right. Q2 momentum in the U. S. Q2 of 2021 Started out slow due to COVID-nineteen resurgence.
However, we had a 53% unit growth versus Q2 of last year and a 26% unit growth versus Q2 of 2019. This is a sequential nearly 20% unit growth versus Q1 of this year. Access restrictions began lifting in Q2. However, we caution that COVID-nineteen Delta variant has begun to impact the business once again. We expect momentum to continue in our contracting efforts and I'm very proud to say that May produced the highest month of SysVu Kits sold in company history.
Next slide. So Q2, favorable trends in the U. S. Exceeding pre COVID levels, Continued strong growth in the U. S.
We can observe monthly volatility through 2020 2021. So it still remains a very volatile situation as we move through the COVID impacts. Next slide. The US continued the blue light cystoscope placements. We've had 20 new tower installations in the first half of twenty twenty one.
We placed 8 in the Q2. However, they were component back orders that delayed the final installation of another 4 towers, which would have brought us up to 12 for the quarter. We are aware that Karl Storz is intending to bring a new imaging equipment upgrade expected sometime in 2022. We know this due to the fact that they're offering multiple programs that ease the transition, an obsolete protection plan, a financing transition packages. Due to this positive development, some customers may choose to postpone purchasing new systems As we move towards the insulate as we look towards the insulation rates in the second half of this year and early 2022.
However, I think for anyone who's been following our business for the past, I'll say a decade, the equipment that is on the market is quite Quite old. This is standard definition technology, so we're excited and hopeful the new technology will further accelerate the business in the future. But right now, our focus is on driving more utilization, more physicians using it, more patients being treated by blue lysisoscopy per installed tower. And we're continuing to build a strong pipeline in new accounts. The current pipeline looks very good and interest remains extremely high.
Many, however, are buying and many are installing and are and are buying the Obsoletecine Protection Plan. However, some are postponing purchases, we believe, in the second half. Next slide. The key initiatives to drive growth in the US, continuing the contracting, ongoing contracts with large health systems and community based urology groups. We have a strong foothold in the veteran affairs where recent tower installations and pipelines building interest and demand with TVAs in the US.
We have strong engagement in peer to peer interactions, particularly through non personal promotional efforts. And we're expanding brand awareness, opening doors to sales reps through advertisements, mailers and building a lead generation machine. Next slide. Let's talk about Europe. Momentum is building in Europe.
2nd quarter unit up 9%, catching up to pre COVID levels compared to 2019, which I think is fantastic. Successfully reconnecting with leading KOLs throughout the European community. We've established cooperation projects With the capital equipment manufacturers, with mutual training and action planning for the second half, now completed and ready for execution. There has been a change in trend, a positive change in trend in the large European future growth markets, including France, United Kingdom and Italy. Next slide.
Favorable trend continues in Europe as well, but still some levels of uncertainty. We're back to pre pandemic levels in Q2 with a slower start to the beginning of this year, but kept pace and exceeded the 2019 levels from March through June. So this is a positive development in Europe showing that we have gained traction and we're starting to pull out. Next slide. The large untapped European markets, We're reversing and stabilizing the key European growth markets.
The change in trends in these large European markets of France, UK and Italy demonstrate the impact of FotoCure's direct sales force in these markets. In fact, in the UK, we had our installation and patients' first dose in over 10 years with a new installation of a blue light stethoscope in the last week. That's fantastic developments as things continue to improve throughout Europe. Next slide. So the key initiatives to drive growth in Europe.
Establishing key advocacy, identifying the strongest advocates for blue light cytoscopy now that we are directly in the markets of Europe. We're working very, very closely with the blue light cytoscopy equipment manufacturers, in particular Richard Wolff, leveraging cooperation opportunities and realizing common business interests. We're engaging with the key opinion leaders and building our own faculty and had our first advisory meetings. This is a group of experts that are out there educating about the advantages of blue Throughout Europe that were not there in the past. Next slide.
I'll turn it over to Erik. Erik?
Thank you, Dan. Well, as usual, I will start with a financial review of our 2 main segments. It's U. S. And Europe, obviously.
And then we will follow-up with The income statement and we're looking we will be looking at the cash flow and the balance sheet at the end. Foreign exchange Has again had a significant impact on our results for the quarter as well as year to date. In the first half year, measured as an average, Fine 13% and euro 5% compared to the 1st 6 months of 2020. In short, the FX impact in Q2 or for Q2 Revenue being negative approximately DKK10 1,000,000 impact of DKK10 1,000,000, which is about 11% of revenue. And for EBITDA, we had a negative impact of DKK2 1,000,000.
Year to date impact was negatively approximately DKK14 1,000,000 for revenue and for EBITDA negative DKK 2,000,000. When we go through the financials, please keep in mind that unless other currency is specified, all amount mentions will be in Norwegian Or as I frequently say, Nok or Kranner. Let's start with the segment view. I'm going to start with U. S.
And we conclude that our sales are still impacted by the pandemic, but to a lesser in the Q2 2020. The company increased the U. S. Unit sales in the 2nd quarter by 53% compared to the same quarter in 2020. And revenues increased year over year with 131 percent to DKK31.4 million in the quarter.
Some of the growth was driven by an accrual of SEK 11,000,000 taken in the Q2 of 2020 associated with a potential discount that we might have had to give. But a lot of it is obviously driven by the impact of the work that we're doing in the business. Foreign exchange has had a significant negative impact on our growth in the quarter. The FX impact in the second Compared to Q2 2020 was negative 16%, measured in dollars and adjusted for the 340B related accruals, the discount In Q2 of 2020, the year over year revenue growth in Q2 was 56%, which is 3 percentage points higher than the unit sales growth in the same Direct costs in the Q2 are in U. S.
Dollar at the level with Q2 last year. It's increasing 2% to 3%. In kroner, we have a reduction of 13% due to FX. Direct costs include local sales, its local marketing, local medical and also local GMA cost. We have on a number of occasions said that we are investing in the U.
S. Market. With COVID-nineteen, however, it has been Made no sense to increase these investments due to very limited access to customers. Therefore, cost containment has been and is important. As the pandemic loses grip, we should, however, expect increased activity level and expenses to drive further revenue growth.
And we see the first signs of this in the Q2. Compared to the Q1 2021, we have an increase in operating expenses in dollars of approximately 6%. The contribution was negative SEK1.2 million in Q2 and negative SEK4.8 million in year to date. EBITDA was negative SEK7.9 million in the 2nd quarter, and this is an improvement from Q2 last year of SEK17 1,000,000. Moving on to Europe and that segment, we see that the European business is still impacted by the pandemic, But like U.
S. To a lesser extent than in the Q2 2020. In market unit sales in Europe in the Q2 of 2021 increased 24% compared to the Q2 last year. This is a strong growth driven by added commercial resources Since the reacquisition of the HEXVIX business in Continental Europe last year. But obviously, the growth is also driven by low sales in the Q2 2020 due to the surge of the COVID-nineteen pandemic.
By country, we find that unit sales in Germany as well as priority growth markets like France and U. K. In the second quarter was at level or higher than average quarterly sales in 2019 before the pandemic. Revenues in the European segment increased 44% to SEK 57,600,000 in the 2nd quarter. The growth was negatively impacted by a royalty true app accounted for in the Q2 of 2020, which included an adjustment of DKK13 1,000,000 for royalty from Ipsen related to Q4 of 2019 as well as Q1 of 2020.
Foreign exchange also had a negative impact on the growth rate. In the Q2, FX negatively impacted European revenues by approximately 8%. We adjust for the royalty true up last year and the FX impact this year, the year over year growth was approximately 130% in the It's driven by the inclusion of the European business. It's driven by less impact from COVID-nineteen, and it's driven by added resources in the European Commercial Organization. Direct cost increased year over year, dollars 18,600,000 in the 2nd quarter And sequentially from the Q1 with DKK7 1,000,000.
The increase, both sequential and year over year, It's driven by the investments in the local European commercial structure. We expect to increase headcount and cost as COVID-nineteen results. During the pandemic, cost containment has been important, and we have deferred hiring and kept spending low without disrupting the business. We ended the quarter with a contribution of SEK30.4 million and an EBITDA of SEK17.7 million or 31%. This is lower than the Q2 of 2020, but driven by the royalty TrueUp accounted for in the Q2 of 2020.
And that totaled SEK 13,000,000. And if we adjust for this royalty, Truvep, we have an EBITDA improvement in the second quarter of SEK 10,000,000. Let's look at the consolidated income statement. Total revenue, CHF 90,400,000 for the 2nd quarter, which is an increase of 68% from last year. Main drivers were the inclusion of the European business from Ipsen, lower COVID-nineteen impact than Q2 last year as well as overall growth of the business.
However, the revenue growth was partly offset by an FX impact of approximately 11% in the quarter. Year to date revenue was impacted by the same drivers, but in addition, we have received we did receive in the Q1 an upfront payment from ACIris of 7 100 and $50,000 or DKK6.4 million. Operating expenses increased 29% in the 2nd quarter Compared to Q2 last year, year to date the year over year growth was 26%. Contributing to this increase was the investment in FotoCure's European Commercial Organization required to support and drive the revenue growth in Europe. Total direct expenses in the second quarter for the European We're at €23,000,000 an increase of €18,600,000 from last year.
And if you adjust for this investment, our operating expenses are at the level With last year, a result of cost containment throughout the organization, however, also helped by foreign exchange. Sequential growth in operating expenses from Q1 to Q2 was €13,500,000 and again very much driven by the European buildup of the organization. During the pandemic, we have maintained our policy not to reduce number of customers facing employees. We have maintained our sales resources and as far as possible maintained customer related activities during the pandemic. It's our view that this will speed up the sales rebound as the world returns from the pandemic.
Looking at EBITDA, 2nd quarter, dollars 5,800,000 which is an improvement of $14,700,000 from same period 2020. Year to date EBITDA was €24,000,000 again, an improvement from last year, this time of €37,700,000 The improvement is driven by increased revenue, including the inclusion of the European business as well as cost containment throughout the organization. Depreciation and amortization in the quarter, euros 6,100,000 year to date, euros 11,900,000 Main cost item is the amortization of the intangible asset related to the return of the European business from Ipsen. In Note 6 to the accounts, we have explained the treatment of the intangible assets and goodwill from the purchase price allocation We had restructuring costs of SEK3,200,000 year to date 2020. The restructuring cost is related to the transition activities for the European business that we did last year.
Net financial items. Net cost of SEK7.3 million in the 2nd quarter and a net income of SEK800,000 year to date. Included is the accrued interest cost For the deferred consideration to Ipsen, in total, SEK 5.7 billion in Q2 and SEK 11.3 billion year to date. Furthermore and due to currency fluctuation, we incurred a net currency gain of SEK15.9 million in the Q1 of the liability, which was partly offset by a currency loss of €2,500,000 in the second quarter. Again, I refer to Note 6 to the accounts for explanations.
Tax expenses in Q2, dollars 3,000,000 negative and year to date, the cost of $8,200,000 Tax income and Expenses relate mostly to our tax asset and tax loss carry forward in the parent company. In other words, it's not tax payable. After net financial items and tax, we have year to date a net profit of CHF4,600,000 compared to a net loss of CHF26,400,000 same period last year. Let's look at the cash balance and cash flow. Net cash flow From operations was positive €8,400,000 in the 2nd quarter and €200,000 year to date, mainly driven by EBITDA and working capital development.
Year to date working capital is driven by the inclusion of the European business, which is impacting, in particular, accounts payable and receivables. Cash flow from investment in Q2 negative €6,900,000 and cash flow from financing in Q2 positive €9,300,000 Both items were driven by IFRS 16 lease accounting. That gives us a net cash flow in the 2nd quarter positive 10,800,000 and year to date positive 5,300,000. And with this cash flow, we end the 2nd quarter with a cash balance of of kroner. Balance sheet.
We end the quarter with total assets of kroner 777,000,000. Kronor. Non current asset was krak 352,000,000 at quarter end. This included customer relationship with krak 154,000,000. Customer relationship is the intangible assets identified in the purchase price allocation for the Ipsen transaction.
Non current assets also include goodwill from the Ipsen transaction of $144,000,000 and the tax asset of 42,000,000 Customer relationship is more amortized on a straight line basis over 10 years, while goodwill is subject to impairment testing. Inventory and receivables were €85,000,000 at quarter end at level with Q1 and an increase from last year end of last year of €7,000,000 This is driven by the inclusion of the European business from Ipsen. Long term liabilities, NOK 165,000,000 Include the earn out liability of €128,000,000 and a long term interest bearing debt, of which €25,000,000 is due after 1 year. Total interest bearing debt, including short term part, was €50,000,000 and is a loan secured from the state guarantee scheme for loans related to COVID-nineteen. The loan is a 3 year term loan.
1st year is interest only. Thereafter, quarterly repayments of SEK 6.25 million. The earn out liability totaling SEK 128,000,000 represents the capitalized value of estimated future earn out payments to Ipsen. The liability is subject to 10 year annuity. And finally, equity at the end of the quarter, DKK 526 million or 68 percent of Total Asset.
And this concludes my part of the presentation, and Dan will continue. Thank you.
All right. Thank you, Erik. Nice job. Slide 19. So let's talk about the strategy for shareholder value creation.
Slide 20, please. So our ambition is still to become the standard Care in this $1,900,000,000 total addressable market. We have low penetrations in most of Europe and the U. S. Moving Our ambition is to move those penetration rates to the dock and Nordic levels.
We believe the key success factors are in place with approval, acceptance, access, Activated awareness continued excitement around blue light cytosphy throughout the world an acceleration in our commercial investments, but smartly as we're coming through the COVID periods. Next slide. So how will we do it? We're going to deliver transformative solutions, improving the lives of bladder cancer patients. Right now, we're concentrated on the acceleration and the Span phase accelerating our current breadth and depth of HEXVIX and SysVue expansion throughout geographies around the world.
We also Our current partnerships around the globe to make sure that they're delivering the value and the expectations of performance that we expect. We're now moving and thinking through the acquisition transformation stage. Looking at these, we're well positioned and ready to build A strong pipeline and executed on a roll up strategy. Our confidence and success is based on really four things. We are an expert in non muscle invasive bladder cancer from R and D and clinical trials through to commercial.
We've achieved a solid position among top KOLs and patient associations around the globe. Our strategy for Fotocure is focused approach to portfolio expansion starting with bladder cancer, whether it be the detection, diagnostic, surgical guidance or treatment of bladder cancer. And we believe no other company is dominating this space, leaving a open territory for FotoCure to fill. Hi. So anticipated milestones and corporate priorities moving forward.
We are focused on regaining our prior sales momentum once the COVID-nineteen pandemic has lifted and in significant Klein, I think we've managed it very smartly through this through basically the last 18 months. We anticipate another 6 months of impact from COVID delta. We'll continue geographic expansion by penetrating many of the untapped European markets, as well as looking for licensing or change in partnership throughout the globe. We'll execute on contracting with group purchasing organizations and large health systems throughout the U. S, leveraging our value based pricing.
We'll present and publish additional clinical data, some of that emanating out of our own Patient registries on the advantages of blue light cytospi with HEXVIX and SysVu. We'll publish and also present at conferences and journals. We'll report on the progress of partner companies and projects and we'll continue to evaluate the strategic product or business opportunities looking for add ons to our current portfolio. Next slide. So in summary, final slide.
We'll continue to SKU, despite the ongoing COVID-nineteen impact, we'll deliver a strong HEXVI revenue growth and we delivered a strong revenue growth In quarter 2 of 2021, we achieved a positive EBITDA. Our cash position increased by NOK 10,800,000. We installed or our partner installed, we supported 8 blue light towers, forward delayed due to component backorders. We do anticipate the second half to begin to slow as customers and our partner prepare for a new version of blue light cystoscopes to hit the market in 2022. But the good news is that the pipeline and interest remains extremely high.
I liken this to, you know, if you're driving a car with no air conditioning, no radio for the last 10 years. And every other car on the road has air conditioning and a radio. And now you have the We do not only get air conditioning and a radio, but power windows and everything else. So it's anticipated that the customers will will anticipate this new system and may Postponed the purchase for a few months until the new system comes out. In the meantime, we're focused on delivering and driving more units per scope that has already been placed.
And that's through the key initiatives in both commercial regions and also through our licensing partners. And we believe we're well positioned in a strong position for post pandemic growth. So with that, final slide, I think we'll move to Q and A and turn it over to Head of IR, David Moskowitz. David?
Yes. Just had to unmute. Thanks, Dan. I appreciate it. Great.
So we'll look at the queue and we will have our first question from Ricard Anderkrans from ABG. It's a 2 part question, Dan. So, I'll read you the first part and then, we'll get back to the segment.
Okay.
First part is, on Karl Storrs. Will they require a down classification from the FDA before launching the next generation blue light equipment?
Answer is no. There is no down classification at this point. So they would initiate a PMA change. So this will not, this doesn't Down classification is just upgrading their system. But I will say that it has, this has been something anticipated by Karl Storrs for well over 4 or 5 years.
It is, as I've mentioned in prior presentations, being under a class 3 PMA Requirements, it is extremely costly, resource intensive and complicated to upgrade the equipment. So the fact that Karl Storz is offering, obsolescence programs and, bridging financing programs leads us to believe that they're on the verge of a new system coming out, which this system that's on the market today is well over a decade old. This is unusual in the device World to have a piece of device on the market that long with no changes. So we're very excited about this development.
Great. Great. And, you know, following that, could you provide more details on what effects you expect from that hardware upgrade on a longer term basis?
You know, we I don't I I won't, guide on that exactly. But I will say that, you know, customers recognize that while Blue Licens Pottery has tremendous advantages, The visualization is a little bit short of the latest technologies on white light, with a high def. So our blue light is standard definition today, And this would be going to high def is our expectation. So this would be like watching the old boob tube TVs with the big, you know, Concave are convex screens and now moving to a 5 ks high def of Plasma TV, much more crisper. And we think that'll impact surgeon's ability to resect.
They're going to see more see it clearer and maybe they'll be even better job at, at resecting the tumors. So
Okay. Very good. And we have another question from our analyst from NORM, Thomas Skivas. What is the exact timing for the new Karl Stores equipment coming out?
We we don't know, to be honest with you. They have to We believe they're submitted to the FDA, but timing is dependent upon FDA approval. So what we're saying right now is this He'll be in probably early 2022. Again, all of this is pending FDA approvals.
Okay. Very good.
I just let me add, you know, that that is why a lot of customers will still move forward with the current system. And the obsolescence protection program is basically paying a slight premium to then get a automatic exchange for the new equipment when it comes out. So, you know, as I mentioned, it's gonna Hello. I think some of the installation, at least that's what we believe. We'll see what really happens.
It could be that it doesn't do anything, but I wanted to be honest about that, We anticipate a new system coming out and it may have an impact over the next 6 months.
Okay, great. And a follow-up from Thomas. Is the hardware upgrade applicable to both rigid and flexible scopes?
This is rigid only.
We have a question, a financial question. When do you hope to reinstate the financial guidance for the company?
I wish I had a firm and good answer for you. Really, what we're making forecasts, obviously, and trying to see into the But every time when we do that, I figure I'm making a forecast for COVID, not for the financials of Fotocure. And I think that's a key word. We need to have a stable situation with COVID before we can reinstate or give a guidance to the market. It wouldn't be fair otherwise.
That also includes foreign exchange, which is highly volatile at this time. Okay. Great. Another question coming in. It just would appear, considering FotoCure's long term strategy, which I suppose is in process, can you elaborate further on Your ambitions, is it fair to suggest that the company should commit to more than just detection, but rather include active treatment and The combat of Cancer Care.
Yeah. Yeah. Absolutely. I did say it in the press today, so I probably circumvent the question ahead of time. But, Yes.
If you think about a uro oncologist treating a patient, there is a sweet spot when that patient is first detected and diagnosed to the first tRVT followed on with surveillance. Throughout that process, and there's the slide that's in our investor deck, it shows basically a grade square where the uro oncologist is really forming some level of protection, searchable, resections and or treatment. And we think any product, tool, Our procedure that is done in that space is actually our sweet spot. Our key and our call point is the uro oncologist. So anything he or she uses It's something that is fair game for Fotocure into the future.
Great. Thanks, Dan.
Okay.
Right now, I'm showing no other questions in the queue. So, why don't we give it 15 or 20 more seconds to see if any come in. Otherwise, we'll wrap it up. Okay. Looks like that's all we have this morning in the queue.
So, Dan, I'll turn it back to you to closing the call.
Okay. Well, I want to thank everyone for joining us today. We're very pleased with performance, particularly over the last 18 months through COVID. If you look at the organization, it's in a very, very strong position. I've been very clear, we've we've, we have managed ourselves quite well.
When COVID lifts and it's lifted, it's ebbed and and, You know, ebbed and flowed throughout the last 18 months, we were there ready to capitalize on the reopenings and we are there again. And I think that bodes well for us. Had we taken drastic cost cutting measures, reduced commercial effort, etcetera, We would be in a very, very different position today. So I feel very, very confident where we're where we are and where we're heading, and I'm excited about the future, the second half of this year and into 2022. So look forward to speaking to everyone again soon.
Thank you.