Good morning, and welcome, everyone. My name is Richard Engberg, and I'm an equity research analyst here at DNB Carnegie. With me, I have Frans Venker, CEO, and Ulrika Drotz, CFO of Mentice. Today, we're going to present the fourth quarter of Mentice. Frans and Ulrika, the stage is yours.
Thank you, Richard. Thanks for having me. We have Ulrika from Gothenburg. Unfortunately, she could not be here, so we are basically Ulrika's virtually, and I'm here in person. What we have today for you is, first of all, the highlights for the Q4 results, as also the financial results by Ulrika, our Chief Financial Officer. I will provide concluding remarks, and then we can go towards the Q&A.
Overall, what we saw for the quarter, and this is also the summary to it, we saw an encouraging sales of SEK 91 million, that meant an organic growth of 18%, and that was equivalent to 5% if you compare that or basically correct that for FX and the especially the Swedish krona, the strength of it. The full year net sales came towards SEK 279, compared to SEK 290 million last year. Again, a growth of 3%, but also due to, again, FX, it was effectively a negative.
Overall order intake, we were very pleased with SEK 127 million, an organic growth of 25%, and that really carried the momentum that we also saw in Q3 into the year. Full year, we had an entire growth of 8% organically, equivalent to 2% year-over-year, again, corrected by foreign exchange. This really showed that in the second half of the year, we had significant momentum, and that's also what you can see in Q3 and Q4, both in sales as also in the order intake. That's more or less corrected also what we did in the first two quarters of the year. EBITDA margin improved towards 25%.
It was 19% the year before, and that also reflecting the positive impact that we had from, first of all, the higher sales, but also the cost measures that we put in place. That is really driving towards the bottom line, and that's exactly what we would like to see. Strong growth, what we saw coming from the medical device industry, and that came primarily also from the Americas, as also from Asia Pacific. The EMEA region normalized, and we saw basically, after a strong year before, we saw that it was almost neutral in that regard. The strategic focus for us remains on improving our healthcare systems business, and making sure that we drive growth in those areas. What we do see here is that the market segments across the different three continents are effectively not not positive to us.
We are compensating for that by the growth in the medical device industry segment, which we see as quite, I said, going well. If we look at the business highlights, what we see is that what we said is also that we would move our physical simulation business not only from Paris, but also from Stony Brook to Denver, and in the first two weeks of January, we have concluded this. This is now all consolidated into Denver, and that business is also up and running. This also the desired impact also towards our cost structure, but also creates a more effective team where we have R&D, marketing, manufacturing, all co-located in Denver in order to drive our physical simulation business.
The second piece is that we also saw quite a high market activity, not only in Q4, but momentum that we started in Q3, in Q4, is also what we continue to see, I said, especially with the funnel in place. We saw that quite positive. It comes towards especially our hardware sales, but also the projects that we do, as also the more or less the software sales and the licenses that come with it. What we do see there is that it's not only coming from a few of the medtech companies. It's a broad base of companies that award the projects and that we're working with, I said, for new projects. Of course, that is positive. That makes us less dependent on a few big customers.
We see that as a broad base, which bodes very well, not only for more equal revenue streams for the future, but also making us more resistant to potential downturns from an economical standpoint. Activity of active approach towards the healthcare systems market, where we continue to invest in order to make sure that we change our proposition and that we're hitting the mark with propositions that truly resonate. Our expectation is that by the end of 2026, we will gain more revenues from this. It's an investment at this moment. What we do see is that due to our large pipeline of projects, which we have for the medical device industry segment, is that we need to invest also in what we call our engineering and R&D environment. That's also what we do, both in Denver, but also in Gothenburg.
We're hiring project leaders, as also software engineers, in order to support our customers and to accelerate those projects that could drive additional revenue also for us in 2026, but also in 2027. We see that as very positive. Very selective investments in R&D and engineering, where it drives additional revenue, so that we have tight cost control in order to make sure that the earnings that we make or at least the revenues that we make, are flowing through the bottom line as well. Focus on the R&D, we are very actively focused on making sure that our realism is top-notch. Realism we mean by is that how we do our simulations of especially devices in a body, that they behave more or less, how do you say it? Very close to reality.
That could either be basically the feeling, the haptics, it could be the how the devices actually move into the body, but it's all the entire anatomy as well. We really stand out there. We are unique and are also being rewarded by our customers, and that's also one of the key reasons why they come to us in order to drive their projects with us. Finally, what I wanted to state is that what we saw in the final quarter of 2025, is that Gulf Upstream, controlled by the Howell family , increased their stake in Mentice. What it means effectively is that there is further focus on growth of the company for Mentice.
Also, this afternoon, there will be an extra shareholders meeting, where there will be a change in board of directors, composition, going forward, or at least proposed going forward. With that, I want to hand it over to Ulrika, who will provide further guidance, towards, the, financial figures, from Q4. Ulrika, floor is yours.
Thank you, Frans. What we see during the last quarter of 2025 is, as Frans has mentioned, increased impact on the market activities that we saw increasing in the third quarter. We said that during the earnings call for the third quarter, this is also what we show in the figures for the fourth quarter. Especially the growth in Americas, as Frans mentioned, is very strong, with an organic growth of 23% for the quarter. That gives us a net sales of SEK 91 million and organic growth of 18%. We are, as Frans mentioned, and as we've said previously also, we are very impacted by the foreign exchange, especially the U.S. dollars and the euros, because we have all our invoicing done in those currencies.
The growth in order intake, during the fourth quarter led us also to an organic growth of above 25% for the quarter. Also, really good to see is the EBITDA margin and the result with SEK 23 million, which is a good increase compared to last year. This is a combination of increased sales and reduced costs, especially in employee costs, as an effect of the strategic realignment that was done in Q2. I will come back to the cost implications of this. The order book, leaving the last year, had an organic growth of 4%. Taking FX into account, it shows a decrease of 6% if you compare year-over-year, and we have SEK 87 million scheduled for 2026.
Operational cash flow is lower than the same quarter in 2024, and this is due to the increased sales, leading to higher working capital and accounts receivables. Looking at the full year, if you followed our earnings call earlier, you know, you know that we like to look at the rolling 12 months perspective, because it gives us a good view on the performance, since we have variability between the quarters. What you can clearly see in this graph is that the decrease that was quite clear in the second quarter of 2025, and as Frans Venker mentioned, we had a very good second half of the year. That is shown in the figures where we moved from SEK 262 million-SEK 279 million.
The growth within the MDI segment in the Americas region continues, and as Frans mentioned, this is both with the existing large customers, but also a broader base of customers within the MDI segment. The region EMEA had a very strong Q3, Q4 performance for EMEA was more stable. Last but not least, on the EBITDA margin, you see here the cost base is stable through the fourth quarter as well. Adding some more comments on orders and order intake, which you can see on the next slide. This really clearly shows the increase of orders within the MDI segment in the fourth quarter, where you can see the Americas region really growing in the graph on the upper right-hand side.
The HCS segment, we don't see it yet in the net sales, but we do see an increase in order intake, mainly actually driven by the region EMEA and APAC. Looking then at the perspective of net sales-... if on the next slide, this is where you can see that the growth within the Americas and the MDI segment is really strong, with a organic growth of 23%. Taking effects into effect, it ends up with 10% increase. As Frans also mentioned, we do not really see the performance within the HCS, the hospital segment. It has been declining for some while, the strategic initiatives that we have been talking about have not yet given the results. As Frans mentions, this is still a continued focus for us.
Finally, some comments on the cost base. As you can see in this graph, there was a reduction during the third quarter as an effect of the strategic realignment done in the second quarter, and we continue to have a stable cost base in Q4. This is key for us going forward to keep this tight cost control. Basically, with this, we think that we're entering 2026 with a stronger pipeline, improved cost structure, and a strategic focus.
Thank you, Ulrika. Clearly, what we see from a strategy and an outlook standpoint is that we have an encouraging development towards our medical device industry business, with a broad, a broader partner base and also sustained engagement. As I also stated earlier, this helps us, if there are shock effects in the economy, we are dependent on a broader base of customers who award their projects to us, and that's also what they see. What we see is that many customers are now coming to us, and that we have a good name, a very good name when it comes towards our realism, but also the simulations that we provide.
What we do see as well is that we are reviewing currently the supply channels for EMEA and APAC to scale also the commercialization and making sure that we can grow there as well, not only in North America. What we do is also support the good things that we're doing in the U.S. We bring them also over towards EMEA and APAC, but of course, in a customized way. We're serving the medical device industry customers in that regard. We have a high pipeline of projects that we have, and it's on us now also to making sure that we drive the implementation of those projects and that we accelerate them, and that we do that with high customer satisfaction, but also in such a way that it drives, of course, the revenues towards Mentice.
The long-term focus and strategic focus on the healthcare systems market remains, so the hospital market. It is a critical value also towards Mentice, and we are making sure that our proposition is going to resonate and making sure that we drive sales along the way. Continuous investment in scaling and also our realism from an R&D standpoint in order to make sure that we drive our propositions even more effective towards our customers. The highlights that we see is that overall, we had a strong quarter from top to bottom, showcasing the results of the strategic initiatives, so effectively the cost control that we put in place, but also the focus on the sales side. We see basically the top line increasing as also flowing down towards the bottom line.
Increased order intake, driven by a MedTech sector, which is strong, also again, as I stated, the sales organization, who is very focused on serving our customers and making sure that we help them as best as possible with their introductions of new devices that they bring to market. We also see a high number of projects that we need to execute on and collaborate on, we're doing that also with the pipeline of projects that we have in place. We are investing in that pipeline in order to bring them down, that will also help us with revenue for 2026 and beyond. Important steps in order to drive simulation, also strengthening our leadership in image-guided therapy.
That's what we do. It basically remains focused on all the entire workflows. If it comes towards our aortic, peripheral, neuro, cardiac, we do them all. That's also where we would like to excel in. Also, continuous investment in next, what we call next-level realism, so that also we are very interested, not only for medical device industry companies, but also for robotics companies, will truly reward the realism that we have in place. Again, that's where we are unique, and also that's why we are awarded those projects towards us. In all, what we see is that Mentice can accelerate its growth potential, and we will work relentlessly also with our partners to execute on the project pipeline that we have in place and actually deliver them also towards the customer base. Our mission remains the same.
We have the right partners. We have the right customers. We have the right people in our organization and the right propositions that really bodes well for 2026. Confidence, what we see from Q4 results, but also how we go into 2026. Thank you for this. Thank you. I would like to hand it back towards Richard for maybe questions and answers.
Thank you, Frans and Ulrika. My first question is, basically, can you elaborate a bit on how your broadened customer base within the MDI segment has affected you? Going forward, is this broadened customer base a sign that the quarter-over-quarter volatility might increase since you get less dependent on large orders from specific customers?
Now, great question, Richard. What we see is that indeed, many of the not only larger companies, medical device industry companies, but also the smaller ones, are coming to us now. They see that we are being recognized by providing the solutions that customers need in order to drive their new devices towards the market, in order to educate and train their customers, but also do it safe and effective for their physicians. What we see is that that broader base of customers will help us, so it make us less volatile also from a revenue standpoint for the future, but also simply less dependent on a few big customers.
In all, I see that as positive across the board, I said, for our business going forward, and it's simply on us to execute on that large base of projects that we have. All, I would say, it's positive in that regard what we are executing.
Okay, thank you. Can you elaborate a bit on the specific initiatives that you're taking within the healthcare segment to return to growth?
Yeah. What we do see in the healthcare segment is that, across all the continents, is that we see strength, investments into, simulation, equipment, and also education equipment. Of course, that also is reflected in the numbers that we show, for what we call HCS. In order to make sure that we truly can grow in this segment, we are investing in the proposition that we do it differently. That means, a lot of hospitals, for example, are, strained if it comes towards personnel, and also the onboarding of personnel is a critical factor. Where we would like to support those hospitals is also providing solutions that help onboarding personnel in a quicker and more, easier manner, and also more cost-effective manner.
That is what we're currently driving and creating with our team in order to do just that. Of course, we also remain close towards basic simulation and training. We'll do that as well for fellows, et cetera. Also there, we need to make sure that we not only provide the system itself, but also the support structure behind it.
Okay, great. My next question is more general. I mean, you visit a lot of conferences within the MedTech industry, how would you say that the industry climate is right now? Is it a lot of talk about investment, or is it a bit more restrained?
It is where the beginning of last year, it was quite restrained. It really picked up during the summertime, and it's a June-July timeframe, and we have seen ongoing investment in the medical device industry segment if it comes towards new devices. We saw that in Q4, and that went also into 2026. It is encouraging to see.
Okay, great. Now a question for you, Ulrika. Can you explain the development in the gross margin during the quarter? Was it mostly driven by mix effects that is decreasing somewhat, albeit to a strong level, from a strong level to a really strong level?
Yes, you're absolutely correct. This is a mix effect of the products. The hardware sales has increased. This is tied to the MDI segment and these, the larger customers, so that is affecting the average gross margin.
Okay, great. I guess this is a question for you. It has come from the web, it's basically, how do you view the cost base going forward? You talk about investment, should we still view it as quite stable during 2026?
Yes, you should view it as quite stable, as Frans Venker mentioned, there will be some minor investments needed to do what we want to going forward. We're really committed to keeping a cost control and a stable OpEx basis.
Thank you.
Maybe one addition to it, indeed, any investments that we might do are directly linked towards revenue generation.
Yes
... or, projects that we have effectively in place. We're very focused on making sure that our cost base remains as low as possible, so that also any revenues that we make flow down towards the bottom line. That's also what we have implemented within the company. You can see it in our results. We will stay operating accordingly.
Great. My last question is a bit on the revenue mix within the Mentice VIST segment. Hardware sales were really strong year-over-year, but the software sales were year-over-year down. Is this primary timing related, as, well, you need hardware in order to install software?
It's timing related. Simply what we saw also in Q4 is some of the medical device industry customers really investing in hardware, and that is the reason why we had large deals also coming in, and then we see a more, yeah, skew towards hardware. Over time, we do not see that that will be a changing mix. It is. It will course-correct itself again.
Okay. Thank you, Frans. Do you have any concluding remarks?
No, it's. Yeah, maybe a few. I would say, first of all, that we encouraged by what we saw in Q3, but also in Q4 results, that sets us up very well also from an activity standpoint, how we go into Q1, especially with our cost control that we have in place, but also the cash position that we have as also the fun off projects. I'd say we look with confidence towards 2026. It's simply all Mentice and our entire team that we have, the great people that we have, but also the great customers that we have, that we simply need to execute. That's what we will do. We are looking with confidence towards 2026.
Okay, thank you. I just received another question online, so if we can just take that before we are finishing the call.
Yeah, sure.
It's related to your R&D investments that you have spoken of in the quarterly reports. How should we look them going forward, and will they increase quarter-over-quarter during 2026 in order to execute on your sales pipeline?
They will to how we look at it, they will percentage-wise stay constant in the P&L. In that regard, from a it will go up because of our growth, but percentage-wise, it will stay effectively flat. The focus will be primarily in making sure that innovations towards our customers, that we go more from basic to more advanced simulation, where we allow for customers to create also their own cases. We create flexibility for our customers in order to drive better simulations for their for their customers. That is our focus, and that's also what we will drive, and our innovation is primarily in that direction.
Artificial intelligence is a key component into this, as also additional technologies, which are linked towards virtual reality or augmented reality, that are going to be part of that solution. That is our investment that we currently do.
Okay. Thank you, Frans.
Thank you.
Thank you, Ulrika, and thank you.
Thank you.
... everyone.