Embla Medical hf Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Yiwei Zhou SEB - - Analyst : Good morning and Anna, thank you for taking my question. I have three questions and I'll do one at a time. Firstly, when looking at the report, you mentioned, there's a competitive pressure in increasing the support business in selected markets. Could you please elaborate a bit here? What markets and the specific product category you see the competition? And I will do a follow up follow up after that.

Question: Yiwei Zhou SEB - - Analyst : Okay. Can you confirm that it is not the premium segment where you have a strong position, you see increased competition, but it's only the commoditized low end products.

Question: Yiwei Zhou SEB - - Analyst : Okay, cool. And, and in this context, and anyone looking at the potential risk from the new tariffs, the US tariffs, Do you think you have a advantage or disadvantage? One compared to your main competitors here in the US. I mean, when you compare it to your production setup or, or supply chain. . REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 8:00AM, EMBLA.CO - Q4 2024 Embla Medical hf Earnings Call

Question: Yiwei Zhou SEB - - Analyst : Yeah. And, and do you have a knowledge about your, the production setup of your main competitors? I mean, we know you have the briefing support production in China and also Mexico where there's a lot of uncertainty.

Question: Yiwei Zhou SEB - - Analyst : Okay. Okay. Thanks. And then my next question is is on patient care. And you talked about in this quarter, the sales growth was impacted by a timing between quarters. Could you elaborate a bit on this? Do you refer to the normal seasonality or is there anything else I have missed?

Question: Yiwei Zhou SEB - - Analyst : Okay. And could you remind me that what is the normal growth in the patient care? Can you talk about 2025 we expect to grow in line or higher than the market growth.

Question: Yiwei Zhou SEB - - Analyst : Okay, great. Thank you. My last question is on the shareback program. You resume the program at a leverage 2.4 times but can we understand that it's that you don't expect any acquisition in the near term given? I mean, you're talking 2 to 3 times, but I mean, 2.4 times is not that low, I would say. So now you resume and bipa.

Question: Yiwei Zhou SEB - - Analyst : Okay. Very nice. Thank you. I'll jump back to the queue.

Question: Martin BWO - - Analyst : Hi. Thank you very much for taking my questions. Anna and swim and congrats with the Q4 and the guidance here. Maybe just a question to the US coverage expansion and how to think about it. I think one of your peers have been a bit upbeat about the near term growth of the US coverage expansion. And I'm just wondering how you see this coverage expansion. I see that you are seeing some patients are being involved in, but how is it embedded to your guidance? That's sort of the first question, how it's impact on your guidance? And the second question would be as far as I understand the product launches that you have now rolled out more or less fully is a major component of work sort of hand in hand with the US courage expansion. Can you maybe just tell us whether you were completely ready for this US courage expansion compared to your peers or if you are a little bit behind your competitors from a product perspective and you need to do some catch up during 2025. That would be, the first question from my side.

Question: Martin BWO - - Analyst : It's a very clear and very thorough. Thank you for that question. And then just two more questions from my side. I'll try to be brief here on your capital allocation and the share buyback you're doing or is expecting to, to reinitiate shortly. Can you maybe just elaborate a little bit on what exactly is holding you back from just starting it now? Given where? And secondly, I guess that you have quite a as you also referred to in your prepared remarks, a quite solid cash flow, bringing the debt levels sort of to a sensible level quite shortly. Are you ready or do you have more bandwidth also from an organizational perspective to start doing M&A again? Or are you still in the process of digesting fire and K at the moment?

Question: Martin BWO - - Analyst : Okay. That's, that's, that's very clear. And then just the last question from my side is on also on the tariffs. When I sort of tried to calculate the exposure to Mexico, I got to sort of third approximately of your cox base coming from Mexico. Is that, is that fair to assume or is it, is that too high? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 8:00AM, EMBLA.CO - Q4 2024 Embla Medical hf Earnings Call

Question: Martin BWO - - Analyst : Okay. That's, that's very clear. I'll jump back in the queue. I got a couple of more, but I'll let my ps also ask some questions. Thank you.

Question: Nissan - Denser Bank - Analyst : Yeah, good morning. I also have two questions from my side. So we saw organic growth pick up in the US with the May and, and Apex L down here in Q4. What should we think about growth going forward? We obviously have a new launch in the US that will pick up here in 2025 and then a question margin and margins like in. So, we have gross margin being quite strong here in Q4. What are the moving parts of margin and what should we take care of or notice here in 2025? Thanks.

Question: Nissan - Denser Bank - Analyst : David, thanks.

Question: Neil slid - - Analyst : Thank you. Just a couple of questions here. So the growth acceleration you experienced in Americas in quarter four. Was there any of this growth acceleration that could be attributed to the increased access to K two patients. And my second question would be on your EBITA margin guidance for '25 and the FX effect. So, you're expecting a neutral FX effect, but the EUR has come down and quite many emerging markets currencies have come down. So, could you just elaborate on the expected FX effect for '25? Thank you.

Question: Neil slid - - Analyst : And then just finally, what do you expect for networking capital in swine?

Question: Neil slid - - Analyst : So if you frame that into networking capital through sales, how would you expect that to end?

Question: Neil slid - - Analyst : Okay. Thank you. I do.

Question: Martin BWO - - Analyst : Thank you. I just have one follow up. Some of the questions were already asked by my peers here, but maybe just one on the trajectory for 2025. With, the snowball effect of the US coverage expansion gradually, I guess contributing more and the comparison base gradually becoming easier through the year. Would it be fair to assume that you will start in the lower end of the guidance or maybe slightly below the guidance and then accelerate through the year? How should we sort of see the trajectory of the run rate for 2025?

Question: Martin BWO - - Analyst : That's very clear. Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 8:00AM, EMBLA.CO - Q4 2024 Embla Medical hf Earnings Call