Earnings Call: Q2 2021

Aug 18, 2021

Hi, and welcome everyone to the 1st earnings call ever at Baikal, and we will present our Q2 for 2021. This is a historical call since this is the 1st Baikou call. The earnings call will be divided into 2 parts. First, we will have a section where the details of the earnings and Eric will tell us what Baikal and Baikal is all about. And as that we will host the Q and A session where I will be back with further instructions if you wish to participate. You can already now use the live event Q and A to the right a post of questions and those questions will be released during the Q and A session. And by that, I will hand over to Erik. Thank you so much for that Isabel and I hope everybody is doing well. I would like to thank you for calling in today and joining our earnings call presentation for the Q2 report that we just released this morning. Today is a great day, of course, for not only from the perspective of releasing a quarter 2 report, But it's also of course a great day in terms of launching of our new brand and our new organizational architecture that we will go through in more detail throughout the presentation. We can go to the next slide, please. So the agenda for today is We're going to start by covering essentially the financials for Q2 and the first half year of twenty twenty one. We will then proceed with Discussing more about Baikou as the company is now positioning ourselves as the leading bioconvergence company and how we anticipate Bring this Biconvergence revolution to reality. We will also discuss our acquisitions during Q2. So bringing on our both American and German colleagues. And then of course we will end the session with the Q and A session. So with that I'd like to of course Thank you everyone again for joining. I really look forward to discussing these great topics with you and let's get started. So you can go to next slide please. Something very well worth mentioning is of course the Pride and the thankfulness that I have for all the amazing colleagues, investors, shareholders and everybody that are on board on this journey. You know in just 5 years we have managed to build a world leading group that offers truly something unique other than life science companies and biotech companies in different industries. I'm very proud to state that over these last 5 short years. We've managed to go from essentially what started as just actually 3 individuals To now close to a 1000 employees around the world, products in more than 2,000 laboratories. And something that strikes me as perhaps even most impressive is the amount of publications that researchers and scientists have managed to publish in this short amount of time using our products and technologies. Of course, market cap and total addressable markets are In the right levels, but to be fair about being what is most important is really thankfulness about these amazing colleagues, these 1,000 employees that are with us today and who will help us really bring this company to the next level. Next slide please. With that being said I'm so proud to present our new architecture and our new brand. Under this new brand and I've noticed a little bit of communication out in the open of course I read all of these things, but sometimes I hinder So from answering to all of them. But I would like to say that, you know, Baiko is a great name for the journey we have ahead of us. Sell Inc got us here. Baikou is getting is going to get us there. The reason I'm saying this is because first of all, Sell Inc, the company that we built over the last couple of years will continue to be the leader in the bioprinting industry. Bioprinting is one of these great legs that we have that the company is fundamentally standing upon. We have the legs of bioprinting, we're standing on multi omics applications, we're standing on cell line development and we're standing on diagnostics. So while cell line will continue to live on as the great leading company it is, Baiko will take on the position as the bioconvergence leader and really bringing this industry to a whole new level. It's beautiful to see these 2, we call them the double helix and these two arrows that you see above the logo, they really represent what we are all about And that is speed to market, getting our technologies and products and acquisitions to market and serve our customers' needs. These symbols will remind us on a daily basis that the products and technologies that we offer, they impact human lives around the world. And that's something that we take with us with great pride and makes us very happy to continue this journey ahead. Let's go to next slide. In terms of our financials for Q2 on the first half year, I am of course very proud and thankful to say that we have achieved a strong organic growth. We've achieved a strong total growth looking from year to year, we've achieved a positive EBITDA And we're standing very well in line with the targets that we have communicated over the last couple of years. But with that being said, I want to introduce my very good colleague, Guston, And I wanted to take over and discuss more the numbers in more detail. All right. Thank you for that, Erik. Yeah, it's great pleasure today to present this quarterly report, of course, with very exciting numbers. This is of course the results of a lot of very hard work across the whole organization during the last couple months that are now presented to here. So we can go to the next slide please. In terms of net sales during Q2, we reached SEK293,000,000, Which is up from SEK40 1,000,000 last year, corresponding to about 6 28% growth, which was last year about 36%. And maybe even more exciting is that the businesses that we've had in the portfolio for over a year in the group for over a year has been growing very rapidly. So the organic growth was 95%. And also the acquired entities themselves have been growing very rapidly since the acquisitions. So this is very pleasing to see. If we look a little bit comparing only also from Q1, we see almost 30% quarter on quarter organic growth and over 120% quarter on quarter growth in total. So it's very rapid growth right now. And the reasons for these are a couple, but we see that the reopening in the U. S. Has contributed a lot To the increased growth rate, as well as seeing that because our customers are using the instruments more coming back to which is driving demand. So I'll come back a little bit to this later on in the presentation. It's also exciting to see that We have positive EBITDA in the second quarter. We reached about €10,000,000 during Q2, Which is up from €96,000,000 last year and a negative EBITDA in Q1 as well. So this is very nice See that we're on the right side there again about 3.6% margin. Down to the profit loss Or the bottom line, we have a negative bottom line, which is in line with our plan here. The main differences Between EBITDA and the profit and loss for us are the amortization of intangible assets in the balance sheets. And these are of course a result of the identified assets in the M and A that we do. So when we require an entity, we have to identify and allocate the corporate assets to, for instance, intangible assets and write this off over a certain period of time, as well as the in house developed assets and technologies that we write off and this is about SEK40 1,000,000 in Quarter and on top of that, we also have about 18,000,000 in interest costs related to our recently issued convertible note. And just a short note on that is that we have a coupon, which is about 2.875%. But in the accounting, we do account for the effective interest rate, which is basically you count for how much the option of the convertible is worth and this translates to about an effective interest rate about 5.8%, which is really the interest cost here. So That's the difference between EBITDA and net profit. If we go into our gross margin, we see it's Quite aligned with the gross margin from last year 69% versus 70% last year. And what's Even more pleasing to see is that the comparable businesses, basically the businesses we had in Q2 last year Has actually increased then from 70.2 percent up to 75.9 percent gross margin. So we've seen a very positive gross margin development. The reason why it's lower than in Q1 where we had very strong gross margin is more about the total product mix with the new So for instance, we have NANDOscribe and also maybe more significantly, we have Genolis, Who has a lot lower gross margin than a lot of the business we've had before and therefore the comparative number in total here is Lower, I'll get back a little bit more to that later as well. We're also pleasing to see, as I mentioned earlier here, is that we've had an increase of sales on consumables and We will also reagents. It's now 61,000,000 in the quarter. Last year, it was about 8,000,000 or 9,000,000. This is an increase with over 600% year on year and the share of our total product sales is about 23.4%. So what we've seen here is a very large increase in absolute numbers, but also an increase in relative numbers. And I'll get back To this and describe this more in detail. If we look a little bit on the first half year before we move on here, we see that net sales for the first half year Surpassed SEK420,000,000 and I can just small note also over the last 12 months rolling, we just surpassed SEK700 1,000,000,000 in net sales as well. So it's a very strong growth there and about 4 40% for the first half year, where almost 80% of that was organic. So very strong organic growth for the first half year here and of course stronger than last year and what we can comment here is that we see and we've continued to tell you in the reports and during this call, so the previous year here or the past year that the pandemic has had a negative effect on the majority of our business where we now see more and more laboratories that Did open up during Q2 that has helped us increase our sales and activities that we can do. And this is of course a trend that we all hope will continue so we can get back to normal. And we have a few businesses that have some COVID business. These are mainly related to production equipment for instance, antigen production. So we have Genolis as well as Sandin working with this. And it's a smaller part of our total revenue. And over time, we see this to be somewhat decreasing as a portion of the total. It's not as significant on the group basis right now. On a whole group level, the EBITDA in the first half year is still negative. It's about minus SEK24 1,000,000, which is very similar to the previous year in absolute numbers. And our gross margin for the the first half year was 71.6%. But also if you're just looking at the comparative or the organic businesses, so to say. We had 78.5 percent, so very strong gross margins here. So next slide, please. If we're looking at the net sales development, It's been very strong over the past year here. It's been fueled by M and A as well as a strong organic growth. Where of course here in the past two quarters especially that we've had a significant boost where we include more businesses into our reporting. So to point down a little bit here in Q2 now the from this year we have Genolis and Napek who is for the full quarter. We have Nanoscribe and Visicle, which are included 1 month in this quarter. And we have Discover Echo, which isn't included at all in the P and L, but they fully incorporate into the balance sheet. And what this gives us is a fact if you go down and compare is that we see that the balances are all look inflated in relation to our revenue or our size due to the fact that they're all included in the balances, but not all included in the revenue for the quarter. And if you go into the details of the report, you can see how much all these acquisitions would have contributed with if they would have been part of the group for the first 6 months of this year as well. In this chart you see here, we have a metric that we started tracking here, which is especially interesting when we're doing some M and A as well to see that we're doing value accretive transactions and we want to make sure that you see we can Fall on track to increase the revenue per share outstanding as well as in the future here, of course, our EBITDA per share and In the end, it's of course the free cash flow or the net earnings per share that will be interesting. This is a start. So, we can go to the next slide, please. If looking at the gross margin and the gross profit here, of course, in absolute numbers, It's increasing very rapidly due to the size of the business increasing so heavily. But also in terms of the margin levels, as I We've had a very positive development on the business that we've had for a while. And the reason for this is that we see more high ticket items, meaning that, for instance, in the bioprinting business, we're selling more and more BioX6, which is the more advanced system of the BioX, so the new bigger brother, so to say, which list price or sales price is about twice from the BioX. And this, of course, fuels gross margin and profit. We see this across the business where we have, for instance, in Satina going into the up site generation from the F site and C site products that was sold a lot before that, but still, of course part of the portfolio. And then of course the high proportion of sales that stem from consumables and reagents, the better the gross profit will be since we have a slightly better margin on the consumable and reagents. However, the more important We'd see increase there is connected to that they don't drive OpEx in the same way. So we'll get back to this in the next slide. What is good to understand here the gross profits before we go to the next slide here before what's good to see here, important to understand is also the product composition or the companies included here, as I mentioned. So we have, for instance, Genolis, which has a lot lower gross profits and margin structure in the 40s. Meanwhile, we have some businesses in the 70s right up to the 80s. And as we grow, the more interesting part is, of course, how to see how this develops as we have them in the group. Meanwhile, the different transactions we bring in and will bring into the future might have a negative positive effect on the absolute number here. So it's just something to keep track of and make a difference between. So we can go to the next slide now. If looking at the net sales from consumables and reagents, this increased with over 600% year on year. And if we're looking at the sale out of the total sales in Q2 isolated, it was 22% and close to 24% if we're looking on out of the product sales. What The consequences or the reasons for the rapid increase here is mainly that the demand for consumables our increasing as the installed base are increasing. We also see that the customers coming back to laboratories are buying more of these consumables and reagents. And we see that we as an organization are also getting better with coupling instruments with reagents And consumables driving this development. Also, of course, in absolute numbers, why we see such an increase is That we added MarTech to our business, which have a high proportion of sales coming from consumables and reagents. And this boosts the absolute number. Meanwhile, in relative numbers to our total sales, we don't see an M and A driven boost here since we have company sessions. Genol is a nano scribe that had very low proportion of sales through consumers and reagents. And if we're looking at the old business that we had Q2 last year, they have above the average of the total group sales of reagents and consumables. So we can go to the next slide. Very exciting to see the strong growth in North American market in Q2 where we saw the organic growth. Remember, this is Not related to the whole business, but organic business. We saw 164% organic growth in the North American market, which is extraordinary, of course. This is related to an excellent work with by the sales team here in the U. S. As well as the reopening of the markets, more activities and being able to go out to laboratories as well. We see somewhat of a lagging market in Europe with slower reopenings and less activities where we can get out to customers. We're also working on things on our side to be able to accelerate this into future quarters. Now we see strong growth, of course, rest of the world from very low numbers, but growing very rapidly, partly due to a new initiative where we're opening an office in Saudi Arabia, which is We're reopening an office in Saudi Arabia, which has been driving this. And of course, Asia has been growing very rapidly also during the Q2. Now about half of the revenue from North America and about 40% from Europe and then about 15% from the rest of the world and Asia. And with that, I would like to hand back the hand back this back to Eric, which will take you through the rest of the presentation here. Thank you so much for that Guston and Great job with the numbers. So with that being said, I want to go through a little bit more about the BIA convergence revolution, the new brand architecture around the organization and how I perceive that we are best positioned to take on these health challenges that we will be working with for the next coming decades. So you can go to next slide please. As a bioconvergence company, of course, our mission really is to solve some of the world's biggest health challenges. And we will do this through the convergence of scientific disciplines such as biology, conventional engineering, including mechanical engineering, biomechanical engineering, electronic engineering, computer science, robotics and a wide range of automation. I believe strongly that if you combine these disciplines with the discipline of biology, all of the sudden you can start answering much more complex questions. The reason I say that is because from what I've seen in the field and from what I see that our customers Start doing. The field is really moving forward very rapidly in terms of how can we improve data collection from From disease models or from patients disease, how can our treatments become more personalized? How can we combine for instance mechanical products or mechanical solutions together with essentially biological solutions for new implants or hybrid models. But most importantly really is to answer these questions we have to find some kind of combination and a middle ground in between these different disciplines. So I'm really excited about this strategy because I see that As a company, we're starting to develop a more of a blue ocean strategy and providing workflows to our customers around the world that can truly work in the field of bioconvergence and get help from it to start treating patients much sooner. So we can go to next slide. Let's talk a little bit about the challenges that we're actually facing here. And the challenges as you know and as you've followed the company on your journey or if this is your first I'm hearing us talk about it. We're really working with 3 major challenges. The first one is preventing future pandemics. I mean, this is a this is a slam dunk application today since this is one of the major challenges that the world is facing. And really the answer To being able to prevent future pandemics is, of course, increased testing. It's about understanding disease faster, being able to model disease. And then of course, being able to either develop different diagnostics for it or being able to develop different treatments. The second challenge that we're facing is that 9 out of 10 drugs, they fail in the clinical stages of development. It takes about 10 to 12 years for pharmaceutical companies to develop new drugs and the cost of it is more than $2,000,000,000 But the reality again is that 9 out of 10 of those drugs that go through the development process, they fail right in the clinical stages. And then lastly, of course, something that is, I think, close to everybody's heart, and something that we have been so proud of working with ever since the beginning of this entire journey is really that a life is lost every hour of the day due to the lack of organ transplants. And this can be very, very sophisticated and challenging transplants such as hearts, but it can also be more simplistic organs such as the largest organ on the human body, which is your skin. A lot of damages happen during, when, you know, major fires or and military exercises wherever it may be and this causes obviously long term or lifelong damages or troubles for patients. So these are essentially 3 major challenges that we're focusing on. Of course, in between there are a lot of additional challenges that patients face that we need to be ready to attack. But if you go to the next Slide, I can talk a little bit about how we will be working with a wide range of technology platforms to really answer these. So if we're looking at bioconvergence, what this is really all about, It's about combination of technologies such as digital platforms, it's about artificial intelligence, it's about large computing. It's about taking mechanical engineering and automation and applying it towards the biology field. What do you get from that? Well, you get disciplines such as bioprinting. Bioprinting is a perfect example of the combination of mechanical or additive manufacturing Combined together with, combined together with material science and material engineering. And if you do that, all of a sudden you can start creating things that you would not be able to do before, which is potential implants or organs or tissues that can be used for transplantation. The same concept applies to other industries that we're currently penetrating into which is, 1st of all, selling development. We can help by speed up the rate of clone selection and biological drug manufacturing. We can help with single cell sorting or sample preparation for the genomics or proteomics industry and and and these these applications, but we can also help diagnostics companies manufacture better diagnostics kits that are more relevant for testing that can test more different diseases because we're using a wide range of technologies that other companies haven't done in the past. So let's look at how the company structure really in this new, in this new constellation and we can go to next slide and it's not really much different from it was before, right? We still have 3 business areas. 1 of the business areas is now Is now named by automation to fit more of the kind of the biological umbrella that we're approaching. But We're essentially working in 3 main business areas, bioprinting, biosciences and bioautomation. And if we look at first of all bioprinting, bioprinting is all about tissue and disease model creation. It's all about how can we create the actual cellular or tissue model that can then later be studied. This tissue model can first of all, of course, be used for pharma drug discovery or cosmetic product development. So for instance, printing skin or producing skin in a laboratory that can be used to develop cosmetic products instead of using animals. The second business here of bioscience is all about disease and tissue analysis. And in this area we work heavily with, with single cell multiomics. We work with selling development. It's one of the buy applications of of of these of these products. But we're also working heavily for instance with microscopy which is a very conventional method of analysis but we're applying our bioconvergence filter To that market and using a lot of new computational models, software improvements to ensure that the customer is getting the ideal solution for their applications. And the last and last business areas is our bioautomation, which is all about tissue and disease mastering. And to master disease, you have to be able to diagnose it much earlier. So at much earlier stages, you can understand what you're dealing with. And in turn that will help you develop better treatments faster and hopefully more personalized. These are of course, in generally very large markets. Looking at a total application area, we're looking at about $150,000,000,000 approachable market. And of course, today the market share at which we're penetrating is a portion of that. We anticipated that to be the overall market opportunity for the company moving forward for the next coming years. You can go to the next slide, please. So if we're looking at the architecture again, Baikal Group is the mother company and is the front facing entity that that will be facing shareholders, investors and essentially also even consolidating to some approach on conferences and perhaps even to customers for certain applications. But what we want to do is that we want to put the control and we want to put as much effort into the daughter company as possible that they can lead by example and they can lead with the great technology that they have developed. For us, it's, you know, we kind of have a saying that it doesn't make sense to acquire great products, technologies, and most importantly, teams if you're going to lose that. So for us, it's all about cultivating the teams that are acquired. It's about being able to do a very, very strategic integration of acquired entities and to maintain the knowledge and expertise with the companies. So for that reason we have chosen a relatively decentralized approach that focuses heavily on highlighting the great things that these daughter companies are doing and motivate them, inspire them and ensure that their R and D pipelines are in line with our bioconvergence strategy And that together we will create the future of health. You can go to next slide, please. So as being a bioconvergence powerhouse, the development agenda in R and D is essentially on Baikal level where we can see a more holistic perspective on where the company is going. So for instance, as I mentioned, one of the very hot areas that we're that we're working in is really the area of medical implants. And if we're looking at medical implants today, many implants are made out of titanium or plastic or synthetic materials. But if you want to start going for more biological implants using different collagen materials or different biological materials, you're going to have to improve the way that we manufacture these implants. And for that reason, we managed to develop our first Actually synergy product between selling, fire printing and cyanion, which is the BioMDX product. And this product is really taking Position in that industry and it's going to be the pioneering product that will pave the way forward for new implants and for potential hybrid implants also going forward. And that's really exciting because all of a sudden Bicco has set the agenda for that industry and for that application And the daughter companies they have provided their excellent products and technology and expertise and together in Unitedly we've managed to bring a new product and new technology to the market. So this is really the beauty of the bio convergence and this is the way that we will be working with the a strong development agenda and a combined R and D entity. Of course, we will offer we will be able to offer market leading products and customized workflows. We will be able to find synergies within the group, both from a sales perspective, but hopefully also from operational and logistics perspective, where we can work with similar ERP systems or CRM systems, get access to each other's customers and ensure that we really have a We maximize the collaborative nature in which these companies in our group are working. We will of course also continue to inspire and highly motivate all of our colleagues to continue this innovative and entrepreneurial entrepreneurial culture that we have built from the beginning because that's we believe is going to be the fastest approach to new treatments for patients. So, as Guston had mentioned already, of course, our M and A agenda will continue forward. This is an important aspect of the Baikou strategy. We will continue to both develop technologies that are based on customer feedback and customer needs, But we will also acquire companies and we will do so as quickly as we have to because we understand that this industry is very, very fast moving. And that means that we have to stay on top of the game at all times of which actually again I have to reference you to our new logo which r d 2 the double helix which actually stands for then future forward fast. Next slide please. So something very important that I mentioned is of course they always having the customers best at heart and that's our continued customer obsession agenda. We believe that the answer to our strategy moving forward will be coming from our customers. It will not be coming from a headquarter or from an office where we sit and come up with cool ideas. We have to continue to be very involved in our communities and listen to our users To make sure that they help us draft the future of what Bio Convergence entails. Next slide please. Let me talk a little bit about the acquisitions during Q2. We welcome 3 very, very exciting companies, very exciting yet different. And we'll talk a little bit about what these companies entail and what they have as a strategy moving forward. I will be covering a little bit more on the technical and synergy side of things. And then I'll let Guston go over a little bit more about the transactional details and how we see that potentially we'll look at the the process moving forward. But we can go to next slide please. Looking at these acquired, companies. First one Nanoscribe was acquired into the business area of bioprinting. The focus of Nanoscribe, it's a beautiful company with great entrepreneurs That have really built a leading position in the field of 2 photon printing. 2 photon printing is the ability to and I'll try to be as as elementary as I possibly can, but it's the ability to print very, very tiny things, that that can be used for a wide range of applications. And of course, in our case, it's all about miniaturizing things, right? So 10 years ago, it was all about making a reaction in the petri dish. Well now researchers and scientists want to make reactions in tiny, tiny wells because they want to study single cells. So your substrates need to be smaller. Your reactions need to be smaller because that will drive down the cost and the price, etcetera, etcetera. So I believe that with NanoScribe, we'll be able to start miniaturizing a lot of things. We'll be able to look at ways that we can combine their technology with some of our selling development also some of our multi omics applications. Very interesting company, very excited for their growth. And we look forward, of course, to continue to grow that. Another great company That was added was obviously Visicle, Visicle under leadership of 2 gentlemen out in New Jersey. VisiCall is very interesting because it is our first ability to enter into more of a CRO market. It enables us essentially If I if I try to explain very simply, if we can't come to our customers because our customers labs are closed, our customers need to be able to come to us. And that essentially provides us with an ability to offer CRO services and ability to do studies for our users specifically in the pharma industry in our laboratories And then provide them with the results. So no matter where they are and what our customers are doing, they should always be able to work with us. And for that reason, I believe that this is a very strategic expansion. And lastly is ECCO, a beautiful company focused on revolutionary microscopy technologies. They've really revolutionized that industry. They're taking a very, very aggressive approach on disrupting And making a lot of digital change to the industry. And this is what we're all about. I mean, this is how we started our bioprinting technology business. This is how we will continue to grow rapidly in the future. So with that being said, Guston, I'll let you cover a few words on the process moving forward. Yes, absolutely. We'll just go briefly through these transactions. And we raised some capital earlier this year about SEK3 1,000,000,000 And we put a fair bit of that into work where you see the transaction multiples as well as Transaction value on this slide here for the 3 of the these three transactions in total is about SEK1.7 billion contributing from all three contributing fully to our sales from Q3 this year. These transactions, 2 of them have a significant earn outs component to the transaction, which we haven't used that much before. The how you will be able to follow this and see this is in our balance sheet. We have an estimation on how much of this debt will be paid out and that will be assessed on a continuous basis. So you can follow that. And hopefully, in best case scenario, we'll pay out all of this and then these companies perform very well and aligned with what they've hoped for. Worth mentioning is that we continued with the approach that we've had Since the beginning with making transactions both on a cash with a cash purchase price as well as a share allocation. And you see it differs a lot between the different transactions on how much is paid in cash versus shares and so on. And this is always a little bit miss guiding because it depends on how you're looking at it. For instance, Echo had a few 100 shareholders, but only a few of them received shares. So for them, they received a lot more shares and these sort of entrepreneurs and employees and the companies who's going to stay there and build this company together with us. And so we're very excited about that transaction and the structure Sure how this is done. And looking forward, we've done 5 transactions in the first half here and here now. Where we have this active agenda as Eric described, we'll continue working in the same way as we've initiated this year and we'll see what that will render in terms of transactions and so on. But what we see is we have the ability to look at more cases, We can be more critical and really spend the resources and we have more people to be able to assess what's right to move forward. And we see that this is very promising for what we'll be able to add in the future. With that, I think we can go to the next slide. Yes. So if we look at the, a little bit more on the what I was mentioning about Visicon and the acquisition to be able to offer more services And actually enter into a new segment for us. It's a beautiful example of how the bioconvergence Technology is really working. It's a combination of AI imaging analysis. It's a combination of very advanced imaging tools. It's a combination of cell culturing. So that's where you have the biology aspect. And with this combination of these three pillars, All of a sudden, you can start giving these pharmaceutical customers and users more insight into more insight, better data, which will hopefully lead to better therapeutics for patients around the world. So so we're very excited to have Visigal on board. We we've already started seeing great centers within, between companies in the business area. And we will continue to, of course, push for stronger collaborations with our customers and always listen their needs. So with that being said, I would like to thank you so much for your time and for your attention. I would also like To again extend my greatest gratitude and and and thankfulness to the entire team, for the amazing work that everybody has done to achieve this fantastic growth. I am so proud of everybody and I look forward to answering some of your questions. Okay. Thank you for great presentation, Erik and Guston. Let's move on to the Q and A session. If you have joined online you can use the live event Q and A to the right and post questions and if you're calling in you can ask questions directly to the speakers. We have a few participants who have addressed, they would like to ask questions, but we will begin with one question from online and I will read it out loud. Let's see. With expanded strategic agenda from bioprinting inks to bioconvergence. How should an investor understand the relevance of the current financial targets? Can you elaborate a little bit about this, please? Yeah, I can address this from the financial targets perspective here. And the way to look at this is that we've Set an agenda for how our priorities are for from 2019 to 2022 in terms of revenue and profitability. And what we said is that we are focusing on growth and we want to grow as fast as possible without running into the red on EBITDA, meaning we want maintain a positive EBITDA and a minimum of 35% organic growth during this period. We haven't made any adjustment to this target and we're likely to look into this target during the next year or so in order to update for our expectations for the next few years to come. But in general, we've acquired businesses that are also acting in fast growing niches Or if they're not, at least they are disruptors in the market where they are, where they will be able to grow faster than the market. And therefore we see that most of the businesses in the group today have an ambition to grow in accordance or aligned with our financial targets. So we don't see any need of changing or addressing the financial targets right now. Thank you, Gustaf. We have some questions online. The first one is from Ulrik Tuttner from Carnegie. Great. Thank you very much, Isabelle. And good day both to Erik and Guston. And I have a few questions, If I may, and first of all, congratulations on a great quarter. But if we can start off with the organic development split, just trying here to decide for majority of sales, I would assume, which is organic is from your old laboratory solutions. Becky, if you can please help us provide with a bit more information on which type of systems are driving this development or any specific applications as well as how does the revenue split between consumables and system looks From an organic perspective, that would be my first question, please. Okay. I think I can address that. If we're looking at organic growth, What's counted in there is the businesses from selling, bioprinting, from Sartina and from Dispendix, Which are the 3 companies that are fully organic in Q2. So no other business has contributed to the organic sales. And what this means in product lines is basically bioprinters, liquid handling in terms of nano dispensing or nano liter dispensing as well as bioprocessing solutions for single cell dispensing, etcetera. And if you're looking more on what kind of instruments have been driving the growth during organic growth during the quarter, we see a strong pickup both from pharma as well as from academia, especially in the U. S. We see that more customers choose the more high end equipment we have in our portfolio going up to for instance BioX6 instead of the BioX. And in this quarter, in terms of organic growth, the bioprinting is a very heavy contributor to the growth here. In addition to that, we see that Dispendix with the liquid handling aspects here or the nanoliter dispensing has also contributed a lot to the organic growth. I mean, in absolute numbers, it's less, but they're growing from smaller numbers from last year. But that's The main drivers during Q2 of the organic growth. And if you're looking at the consumables and reagents in relation to product sales for these 3 companies combined. We don't disclose it exactly, but it's just slightly above the average of the whole company this stage. So the added on acquisitions we have to the group today have had a slight negative impact on the proportional sales stemming from consumables and reagents, but of course, the positive impact on the absolute number of sales stemming from this segment. Great. Thank you, Dustin. And if we were to move on to, as you mentioned, there is an opening up in the U. S. And I know that we You talked about last year that around 50% of the commercials labs and 70% of the academic labs were closed down during the sort of peak of the pandemic. How is this ratio now, would you call it out to be close to fully open as well? 154% organic growth in the U. S. Is obviously impressive. But now you have built your own organization around Europe. Would you call it out to be successful as of yet? Or is it too early to call out how much of the pandemic has slowed down You are transitioning from distributor to being your own sales organization. What should we expect in the next few quarters from both the European and Asian markets beyond and obviously deserve the good development in the U. That's a great question, Ulrik. I can hop on that one first and Gus, you can add more to it if you want. I mean, I want to start by saying, I think that the only reason that we're seeing growth in Europe right now is because we have a direct sales force. And that's a pretty stark statement, but I want to back that up a little bit. The distributors that we've seen in Europe, many of these companies basically threw in the Powell in the beginning of the pandemic and many of these companies have focused heavily to transition to sales of products that were immediately needed for combating the pandemic. So for instance, if you're a distributor and you're selling products that can be used for production of cell media or that can be used for the production of vaccines. And then you have also an arm that are used for laboratory equipment that can be used for genomics or it can be used for bioprinting. You're going to focus all your attention on the products that can be used for production of vaccines. With that being said, that's nothing that I could control or nothing that our sales managers or sales reps could control in that case. I mean, we couldn't, We would not be able to force distributors and companies to switch their focus on, on, on different products. It's their business. They have to protect their business exactly the same way that we have to protect our business. And for that reason, I believe that we did the right decision by establishing a our own sales force in Europe. And for that reason, we have been able to actually show growth during this very, very difficult time period. I want to hop over a little bit to the US where We're seeing the market open up quite nicely over Q2 and the fact is you've seen You've seen laboratories have started back up, you've seen customers return, we've seen research ongoing and that's very positive and been driving the majority of our growth, I think. That will, of course, return to Europe, I believe, in a certain amount of time. When? I don't know. But what I'm seeing now is that Europe is still being very cautious in terms of returning to business as usual. And you're not seeing sort of different in willingness and adopt to this new type of technologies or incorporating single cell It's not a challenge. I mean everybody is super interested in the products. The products are hot. The applications are very hot. It's just that when our customers in the U. S. Say that it's hot, They're ready to make a commitment because they are in the laboratory and they need the products. When the customers in Europe say that it's hot, Then they're evaluating and they're saying once I'm back in the laboratory, I'd be willing to place an order, I'd be willing to for, you know, continue that conversation. And that's the challenge. It's a time question and that's, and that's of course painful to watch, but that's also why we're trying to trying to introduce more, more ways of working with customers in Europe, perhaps through different CRO models, delivering the tissues instead of perhaps the equipment to print the tissue And being innovative about the way about our business model. I think that's going to be helpful. Great. Two more questions on my end, if I may. And then moving on, perhaps the Industrial Solutions and obviously a very strong quarter. And I think one needs to address how much is COVID related out of these deliveries. And as well as since it is quite lumpy in terms of revenues from the segments heavily tilted towards the end of the year. Can you help us Provide with some more granularity on the order backlog, how it looks, if you're comfortable in growth going into Thank you, Eric. If we look at some of our business historically how they perform, we see that especially the bi automation with Saion and Genolis have had a strong end of the year with deliveries and a lot of budgets that needs to be Closed out and so on. So we if you're looking historically, that's what we've seen that Q4 has been stronger than Q3. We see in terms of the COVID business that for us the best is if COVID The impact on code disappears that would benefit our business the greatest. We do so on the other hand, of course, have some business, which is our sold Companies, diagnostic companies and so on working on applications here. However, if we see a decline From nations in terms of wanting to have pandemic preparedness or pandemic, preventions in the next a couple of years when this has been able to establish these centers. We see that the demand from our ordinary customers will most likely replace that quite rapidly as we now have to prioritize the more urgent orders in many cases. And This is also just a small part of what these two businesses are doing. So it's not significant in that way. Great. Thank you, Guston. And last question on my end, and sorry for asking so many. Just on your sort of M and A strategy in your in their last acquisitions. And the risk that Nam described, obviously, it looks like quite similar technology to Holograph X That it cannibalizes on that development. And as well as following that around on the Visicoll, it operates quite a different CRO business model. Did you believe that, that would be an opportunity for the entire bioprinting segment to operate through SCRO model partly in order for that To increase adoption among your end customers. I think, if I start with the first one, I don't we don't see, we don't perceive any cannibalization effects From the NanoScribe Business and NanoScribe Technologies. Actually, it's the opposite. We see a possibility to open up different price points And expand that product portfolio to ensure that we can penetrate from different sides of that market, both from a cost effective standpoint, but also more from a technological and advancement standpoint. So I think that's it's been a very positive positioning through the acquisition. In terms of Visicoll, I would love to see more bioprinting offerings through contract research, Yeah, for research contracts, because I believe that that will speed up the rate of adoption. It will also enable us to get into even more cost effective laboratories and catch user at a much earlier stage. If somebody is not interested in making an investment to buy a printer or an equipment today, then perhaps We can start off with a smaller exploratory study where we can prove, you know, show the results that the customer wants to see. From that, we can take that into enabling these users to either continue with contract research or they can get their own products and equipment in their laboratories continue on their own side. So I definitely see the CRO approach as a major enabler and a market opener for us. Great. Thank you very much everyone for answering my questions and I'll be back in the queue. Thank you, Ulrik. And we have also Niket Amdekan from ABG on the line. Please unmute yourself by pressing star and 6. All right. Hopefully, everyone can hear me. Thank you for taking my questions. So first one, can you talk a bit on the magnitude of the impact from the late orders coming in Q1 into this quarter? And perhaps also which segment the revenues came in just to get a bit better understanding from that one? Yes, I think if we're looking at this, there's a couple of different ways to We can address here in the bio automation segment, we have a continuous big backlog. Delivery times here could be up to a year for some of the equipment due to the backlog we have there. The more rollover we So it's more of the laboratory solutions kind of equipment where we see shorter delivery times. In terms of how big the impact is here. We haven't quantified that exactly and I don't have the exact number. It's not substantial. We're talking in a handful of SEK1 1,000,000 in this quarter that we'd had a positive effect from that. But yes, this is something we'll see from quarter to quarter. And I think we had, yes, slightly more rollover from Q1 to Q2, but it's yes. All right. Thank you very much. And you mentioned in the Also that some investments are being made. And I noticed that you mentioned investments in the area of single cell proteomics. Are you seeing an increased interest in that area from commercial labs? Because it's quite compared to genomics, it's quite early days in that area. Or is that more a preparatory to be ready for the future, so to speak? Can you talk a bit about that opportunity? It would be interesting. Yeah, absolutely. So specifically actually even on single cell proteomics, it's as you're saying a very, very early application and a very early industry that's coming about. And I see I love because I see certain resemblances to the bioprinting industry where we could be very early with a disruptive product at the right price point an offer, the ideal solution to the customer while continuously listening to their feedback and reiterating And coming back with new versions of products that will fit their needs as their needs expand over the coming years. So I believe that our investments now in the field of proteomics are very strategic. We're betting quite big on that. The proteomics market will continue to grow very rapidly. And we want to become one of those players that enable a wide range of sample prep possibilities for proteomics analysis. So I think by investing heavily now And being early, having the right product mix and having the right product portfolio for it, we can take a leadership position in the next coming years. Right. Great. And a final one from my side. Biosensors seems to be a very interesting area for potential M and A going forward. Given that it is such a broad segment, where are you focusing in that space. And what potential do you see in that segment would be interesting to hear a bit about. Yeah. That's a good one. I love where biosensors are going. I'm spending a lot of my nights reading on these types of applications And where that industry is headed. It's fascinating to see how much data and information you can gather From a drop of blood or a drop of sweat. And the fact is, if we think, I categorize these things, It might be wrong, so don't quote me on it, but I categorize them essentially into 2 things, right? So one is for disease modeling or disease analysis, quite complex, right? I mean, you definitely need more than a drop of blood in that. You need quite a lot of blood and that would be quite challenging analysis and and you want to do that based on on on regulatory environments and approvals. Then you have the more simplistic approach, which is essentially, which is essentially looking at kind of wearables and health detection and early signs of certain disease or early signs of things to keep in mind. And I like this early sign market because it's kind of like the iWatch, it's kind of like, you know, this wearable rings and things like that because these are applications that will definitely determine and become a more personalized approach for users around the world. People will become a lot more interested in their health. People will become a lot more interested in specifically their treatments, their disease as it's very different from others disease. Our bodies are completely individual and separate from each other and that's how we need to see things in the field of medicine. So I believe that really the biosensor and the wearables industry is going to drive a major revolution in terms of how diagnostics, treatment development and even the entire drug discovery market is going to move. All right, great. So it definitely sounds like something that could be of interest To expand with them for you guys going forward then? Yes. Great. Thanks. Thanks again for taking my questions. Have a good day ahead. Thank you, Riigen for your questions. So quite many questions today. So I think next time we have to make room for more time in the Q and A. But actually later today you will have a new chance but good to know who will join for Twitter live on the Baikal Group's Twitter account at 1 pm Eastern Time and 7 pm Central European Time. So stay tuned for that. And if we move on to the next slide please. Time trial fast when having fun. So put a marketing calendar for November 10th. This is the day we will release our next report for the Q3 for 2021. And we can move to the last final slide for today. This is what it's all about. So thank you everyone listening in to Baikal's first earnings call. And thank you for all the great questions being asked. Have a great Wednesday, everyone. Thank you and goodbye.