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Edited Transcript of VITR.ST earnings conference call or presentation 6-Nov-19 9:00am GMT

Q3 2019 Vitrolife AB Earnings Call

Kungsbacka Nov 22, 2019 (Thomson StreetEvents) -- Edited Transcript of Vitrolife AB earnings conference call or presentation Wednesday, November 6, 2019 at 9:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Mikael Engblom

Vitrolife AB (publ) - CFO & IR

* Thomas Axelsson

Vitrolife AB (publ) - CEO

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Conference Call Participants

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* Arvid Necander

Redeye AB, Research Division - Analyst

* Björn Olander

Murgata Equity Research AB - Equity Research Analyst & CEO

* Patrik Ling

DNB Markets, Research Division - Senior Analyst Healthcare

* Victor Forssell

ABG Sundal Collier Holding ASA, Research Division - Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to the Vitrolife Interim Report January to September 2019 Conference Call. (Operator Instructions) I must advise you that this conference is being recorded today, Wednesday, 6th of November 2019.

I would now like to hand the conference over to your first speaker today, Thomas Axelsson. Thank you. Please go ahead.

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Thomas Axelsson, Vitrolife AB (publ) - CEO [2]

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Good morning, and thank you for listening in on Vitrolife Interim Report January to September 2019. The speakers today will be Mikael Engblom, he's the CFO of the company; and myself, Thomas Axelsson, the CEO.

So let's start to go through the quarter then with Page #2. In summary, the quarter was a good quarter with continued profitability. The sales of SEK 378 million and it was a growth of 33%. Sales increased by 27% in local currency, and out of that, it was 15%. It was an organic growth. EBITDA margin was 41% and in numbers, SEK 155 million.

Please change to Page #3 and Mikael and I will start to go over the reasons behind this growth -- profitable growth.

Okay. So let's then look on sales and growth per market region. The growth, as I said before, was 27% in local currency and 15% was the organic growth.

If we start then from the left of the page, from Americas and then go through the regions. It was a sales of SEK 71 million in Americas. It was a good profitability. We are quite successful right now with the Genomics and also with the Media in that region. They -- we are still, and I can say that for all regions -- not all regions but for Americans and EMEA, we are distributing the Illumina products within the Genomics side for this field then, for the IVF field. The growth was 35% in Americas.

If we go then to the region EMEA, it was a growth of 26%. In numbers, it was SEK 147 million. There was a growth in every business unit and it was also growth in almost all geographical areas. And part of the growth there is, of course, due to the Genomics, too. But as I said, good, good growth in every business unit.

What we are calling then Asia, that is Asia without Japan. It is mainly China, India and Thailand, more or less is -- then the growth there was -- and I would say only 4% and I will explain a little bit more later when we come into the business units. The growth there was within Time-lapse and it was a negative situation for the sales of Media. The sales was SEK 89 million.

Then for the Japan-Pacific, it was a fantastic quarter, the growth was 69%. The sales in that region is increasing due to more sales of all products. But I would like to mention that during this quarter, we have had good sales of Time-lapse. And one product that we introduced, for instance, was the EmbryoScope Flex. That's the -- that's our largest product within the Time-lapse family. It takes 24 patients. So overall, it was a good growth of total 27%.

Let's then change to #4, and look into the business units. So let's start from the top. The Genomics business, sales was SEK 37 million. And that is, as I mentioned before, only for the regions Americas and EMEA. Within that field, we are keeping up with customer demand and we are also continuing with building more and more support. And since this is sales, but I will comment also that we are continuing with the product development in this field.

Then move to the ART Equipment. ART Equipment, as mentioned at earlier telephone conference, we have changed the product mix and are only more or less producing our own products with better profitability. The growth is 35% and the main product there is lasers. Sales of SEK 19 million.

I would like to say that we have not yet got the approvals for the last version, it's called NaviLase, in U.S.A. and China, and those are the biggest market for lasers.

Time-lapse then, a growth of 45%. Sales of SEK 108 million. It is growth in all product lines, more or less. We have new products that is driving the growth and it is EmbryoScope+ as talked about before. We have introduced Flex, too, and I will say that it's a great interest for Time-lapse. It's coming from the last 2 larger conferences. It was the one at ESHRE for Europe this summer and then also during this season, it's been the ASRM in U.S.

We are, in that range, continuing the product development, both for hardware and for software, and are continuing our work with artificial intelligence to make the products more accessible for the users, it means easier to use.

Disposable Devices, growth of 11%, SEK 46 million in sales. We are coming out of a situation where we have had some problem in delivering products. We are still increasing the production and that is a trend, and we are increasing our capacity. So we can see that it is growing trend there, and it's 11%.

Media then, it is a growth of only 1%. It has been growing good in all regions except for China then. It's good growth within the cryo products. And by mentioning that China and cryo products and product development, I would like to change to Page #5 and look into the Media.

During the quarter, a couple of things have happened that I would like to describe regarding Media that is, for Vitrolife, good news. First is news regarding our development and what has happened there. During the quarter, we -- or let's say, customers were presenting data at U.S. ASRM conference. The data there was from a multicenter randomized controlled trial and it was in a sibling oocyte multicenter study.

And what we have done is that we have done some changes within our Media for better performance. The biggest breakthrough in changes are the right combination -- I would like to say, the right combination of antioxidants. Antioxidants is something that is well known within this field, but it is just a question about getting the right combination. And it is for 3 different antioxidants. It is acetyl-L-carnitine, N-acetyl-L-cysteine and also alpha-lipoic acid, and all of them are used in sequential culture media system.

What's good is that the Japanese studies that we have done is showing very good results. It is an increase definitely for those over the age of 35. It is an increase in clinical results, in implantation rate, fetal heart rate and also in ongoing pregnancy. We are waiting on more data on baby born then. The reason behind this, let's say, success with the product development is that it is all about the reduction of oxidative stress.

Okay. Then during the quarter also, we did a launch of the oocyte vitrification media in the U.S. We got it approved, FDA approval during the quarter, and we did a launch at ASRM. So now we are able to go out on the U.S. market and have both media and also the handling consumables, the straws that you are using when you're handling the oocytes.

This is a good thing for Vitrolife because it is an -- it is a situation and it is a field where we do believe it's going to continue the good growth, and it is growing due to the growth of social freezing, but also that you can take action before medical treatments that can cause some kind of fertility-related problems. And with the usage of vitrification and oocyte pick-up, and you have a good survival rate, that's a very good way of reducing the, let's say, the problem of some kind of medical treatment.

Look upon then the upgrade of Media range in China. I said before that there was growth within Media but only 1%, and China media market is very important for Vitrolife. We have had, as explained before, some problem with the sourcing of raw material. We have overcome that problem during the quarter, and we are now building up production and inventory for reintroducing them on the China market. And all the products are for the culturing field.

We are also, during -- we have been doing that for many, many years but I would like to address that the registration process for our products, so we can have a global harmonization of all media, is going well. And we expect that some of the products that we are selling in other countries will also be regulatory approved within the near period. If that's going to be Q4 or it's going to be Q1 or Q2, you can never say because it's difficult to actually know when we are getting the registrations paper. But it goes quite well.

So overall, it has been a good quarter in all product groups, in all territories and advancement within our product development for Time-lapse and also within Media.

By that, I would like to hand over to Mikael on Page #6.

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Mikael Engblom, Vitrolife AB (publ) - CFO & IR [3]

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Yes, thank you. And now I'll take you through the key financials during the quarter. So we recorded sales of SEK 378 million, as Thomas mentioned. About SEK 20 million of that increase was due to currency effects, primarily the weakening of the Swedish krona.

Gross margin was 64%, down 2 percentage points compared to the second quarter last year, and that is primarily due to the Genomics product mix. So the Genomics products have a lower margin than the average of the group, so it impacts the product mix negatively with about 2 percentage points.

EBITDA was SEK 155 million up compared to SEK 121 million same period last year. Out of this increase, about SEK 9 million is due to currency then. The margin of EBITDA was 41%, so down 2 percentage points compared to last year, and it is the Genomics product mix that is impacting this compared to last year as well as that we have a positive effect on the new accounting standard, IFRS 16, which contributes with about 1 percentage points compared to last year.

Net debt in relation to EBITDA is minus 1.1. So we have a net cash position of close to SEK 600 million at the end of the quarter. And as before, our ambitions are to use this for value generation -- generating acquisitions.

With that, please change to Page #7 for the outlook. So as before, we expect a long-term market growth of 5% to 10% in monetary terms, and that's broken down through cycle growth rate in treatment of 3% to 5%, and that you are using more and more treatment and technology for each treatment, which then adds the value for the industry to what we expect, 5% to 10%.

As before, we will continue to focus on sales expansion and that is both that we are adding the resources in sales and support, and also work more closely with the large and growing clinic chains of the world.

We will also continue broadening the product offering, and this can be done both by product development, as Thomas mentioned before with the Media development, but also through acquisitions.

With that, operator, we are ready to take questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from the line of Björn Olander.

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Björn Olander, Murgata Equity Research AB - Equity Research Analyst & CEO [2]

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Yes. Björn Olander, Murgata Equity Research. Three quick questions. First of all, very good quarter. But as always, I try to focus on the uncertainties. So starting with the Media business and the situation in China. Has that been fully resolved now? And how it's -- I mean, was this resolved during the Q3? Or has it also affected the fourth quarter? So that's the first question.

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Mikael Engblom, Vitrolife AB (publ) - CFO & IR [3]

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Yes. I can respond to that, Björn. Yes, the sourcing production issues have been solved during the third quarter, so it impacted the third quarter. And during the fourth quarter now, we are introducing the products again that we have not been able to supply to the Chinese market, and then we're working with the clinics to change from the competitive products that they have had to use during the time that we have not been able to supply the market. So we will work with the clinics now to teach -- to try to convince them to change back to our products during the fourth quarter.

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Björn Olander, Murgata Equity Research AB - Equity Research Analyst & CEO [4]

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Because you're mentioning in the report that -- I mean, it seems like many clinics have switched to competing products and now you're trying to switch them back to your product, so to speak. How easy is that? And is there risk that this will be sort of a long-term effect, that they will simply stay on the competing products?

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Thomas Axelsson, Vitrolife AB (publ) - CEO [5]

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Good question, Björn. You know that it is not all products that we have a problem with. So it is just part of the products, mainly the calcium products. So of course, there have been a lot of disappointed customers as well as disappointed within Vitrolife that we've not been able to support the customers within Q3 then. That has been a struggle for the customers. They have been working with it and have had some concerns. Since they are familiar with our products and they've had excellent results with them, it is not that we are introducing new products, it is that they are able then to get them back into their normal routine.

So I wouldn't say that it is a huge challenge, but of course it's going to be some disturbance during Q4 too because they have some inventory currently because they didn't know when we were going to be able to support them with the new products. But it's not a long-term issue.

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Björn Olander, Murgata Equity Research AB - Equity Research Analyst & CEO [6]

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Okay. Moving on to Genomics. There's obviously a very good start for that business area, so that's good to see. I'm a bit curious about the Asian market. You are developing a new generation of products. Could you put some more color on those new products and, more importantly, maybe when you think they will be launched?

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Thomas Axelsson, Vitrolife AB (publ) - CEO [7]

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Okay. I don't know if I can comment exactly what we are doing, but I can give you some hints that is not any secret. When you're mentioning the Asia and Pacific market, that is not included in our agreement with Illumina. We will get the rights to sell to those markets when we are ready with the new product. The product development within this field is considering the changes that we have seen and that -- those changes are that, it is to have a product that is as stable and good as the current VeriSeq product, but also at the same time being a little bit more cost-effective because it's been a cost situation within this market.

The second thing is also to be able to respond and see how we -- since we're focusing on the IVF, the fertility market, how we can make this Genomics a little bit more easier and a lot, lot more cheaper for the end user, the patient. And the situation there is that when you do, for instance, a PdtA then, is that it is a process of monitoring the embryo. You are using lasers, you do the biopsy. You are then -- there's a lot of moments there.

So what we can foresee is that one day, it's going to be a market of easy-to-use products, both from a software situation and also from an ability to maybe skip a couple of those steps that is labor-intensive and add cost. That would, for instance, be that you can do Genomics directly from taking a small sample of the medium. So it's going to be a noninvasive situation. So it is to improve the current traditional one where you do biopsy and have good results, and then also try to see that you're getting a noninvasive product line that are as stable and have good performance as if you do it with the biopsy. So that's to say that -- the trends that we are working on.

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Björn Olander, Murgata Equity Research AB - Equity Research Analyst & CEO [8]

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Okay. And those new products or concepts are not limited to Asia, that you are (inaudible) also globally?

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Thomas Axelsson, Vitrolife AB (publ) - CEO [9]

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No, no, no. I mean this market is for sure a global market. Of course, it is starting always, as it has been in this field, in U.S. But I would like to say it is a growth potential. A lot of the growth potential is regarding cost for the end user and the accuracy of the test.

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Björn Olander, Murgata Equity Research AB - Equity Research Analyst & CEO [10]

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Okay. Last short question. Just Time-lapse had another impressive quarter. Are there any one-off effects in Q3? Some major orders? Or you have recently introduced new products. Have any picture of launch volumes or something like that? So just to sort of calibrate the expectation for the coming quarters.

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Thomas Axelsson, Vitrolife AB (publ) - CEO [11]

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I would like to say that I've answered before, is that when you go into a business like hardware and where it is -- where the current penetration on the market maybe is around 15%, it is still 85% of the market that is not using Time-lapse. What we will see then is that there's going to be some variation between the quarter that, okay, one quarter you are selling a little bit more hardware, then another quarter, you're selling a little bit more -- or a little bit less.

What I would like to say is that we believe in this. And by us saying that, yes, just because we are selling to one center, we shouldn't be able to sell to another center the next quarter. I don't think that is correct because it's a long trend then when we are getting customers, that is how we are working with hardware. It's going to be fluctuations between the quarter, but we believe it is a, for sure, growing segment.

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Operator [12]

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Your next question comes from the line of Patrik Ling.

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Patrik Ling, DNB Markets, Research Division - Senior Analyst Healthcare [13]

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A few questions. First, if we start with the Media. You said that you are in discussions in China regarding introducing new products. Could you elaborate a little bit about, is it the full portfolio of products that you sell on other markets that you are trying to get approved in China? Or is it just a part of it? Can you give us some color on how we should look on this?

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Thomas Axelsson, Vitrolife AB (publ) - CEO [14]

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Okay. Okay. Let's then explain. We are not introducing any new products, we are getting back with the products that we have some sourcing products (sic) [problems] with. So that's the first thing regarding the market and the sourcing problem that we have had in Q3.

And then what I tried to explain, and I didn't do that successfully, is that what we have been working with for a long, long time is with the Chinese FDA, National Medical Products Administration, to get the same kind of products that we have approved in other territories. Their approval process in China, unfortunately, is quite tricky and it can take more time than what is expected.

So what we're doing is that we are waiting on those registrations. But that has nothing to do with the current market, the market -- the products that they are used to work with. It's just that those products that we then will be able to sell also in China are the same products that we are delivering to the rest of the global market. So that's the harmonization of our Media range.

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Patrik Ling, DNB Markets, Research Division - Senior Analyst Healthcare [15]

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Yes. But that was the way I had understood it. So I mean, the products that you sell in China today are not exactly the same as you have approved in other markets. So when -- if you look at what you sell in other markets, are you trying to get all your products approved in China? Or is it just part of it? Because at some point, just listening to you, it sounds a little bit like you're expecting the first approvals for the newer products in China or the products that you sell in other markets to come relatively soon, and then you will probably end up -- or you could potentially end up in a situation where you are both reintroducing the products that you have sold and have had sourcing issues with at the same time as you might want to introduce completely new products. Is that an issue? Or is that the potential issue?

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Thomas Axelsson, Vitrolife AB (publ) - CEO [16]

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I don't see it as a potential issue because the market in China is when you do a registration process, you are also doing clinical studies to get local data so you can prove the reason behind the registration and also get the user, let's say, feedback. So the products are -- they know what the products. It is a global world and it isn't so big. You go to different conference, you know what's happening. We have had prediscussions with key opinion leaders regarding the product range. So I don't think that's going to be any major problem because you will not need to change your procedure. You will not need to change any step, any timings in how you are dealing with the media. It's just media that is performing a little better.

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Patrik Ling, DNB Markets, Research Division - Senior Analyst Healthcare [17]

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Okay. But my thinking was that, is there a risk that a client that has not been able to buy products from you currently due to the supply issues and are therefore using competitor products, instead of buying the old products that they get -- that you get back from solving the sourcing issues, is there a risk that they might wait to change back to instead change to when you get new products approved on the Chinese market? Or is that just not a risk at all?

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Thomas Axelsson, Vitrolife AB (publ) - CEO [18]

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It's a risk in all business, of course. The risk that I see would like to take it into consideration of short-term financial, let's say, situation is that the risk is the time it will take to -- for the customers, as we view it, to end their own inventory of other products. And that's the major risk, how quickly will they then be able to transform back. And maybe if you take the risk assessment, that there is a few customers that will not change back. There's always a risk.

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Patrik Ling, DNB Markets, Research Division - Senior Analyst Healthcare [19]

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Okay. Okay. Great. Could I also ask about the Genomics development? I mean you're developing your own development -- or your own Genomics products. And could you give us some info on how you're proceeding there and what's the timeline and if anything has changed from what you communicated before when it comes to when you can introduce your own proprietary products?

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Thomas Axelsson, Vitrolife AB (publ) - CEO [20]

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Yes. I don't think there's any more news than what I've said. We are working on it. That's our ambition. We have a team and we have partners in this field, and it is a development and we try to have them as ready as possible, not any time line.

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Patrik Ling, DNB Markets, Research Division - Senior Analyst Healthcare [21]

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Okay. Then last question. Could you update me on pricing for the EmbryoScope Flex product compared to EmbryoScope+ and the ordinary EmbryoScope?

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Mikael Engblom, Vitrolife AB (publ) - CFO & IR [22]

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We don't disclose any specifics on pricing of specific products, but I mean, obviously, the EmbryoScope Flex is our most expensive machine as it has the highest capacity. So -- and you also have some scale effects as a customer when you buy a larger machine compared to a small machine. But we don't disclose specific prices for the different products.

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Patrik Ling, DNB Markets, Research Division - Senior Analyst Healthcare [23]

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Okay. And you could run 26 embryos at the same time in that one?

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Thomas Axelsson, Vitrolife AB (publ) - CEO [24]

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24.

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Patrik Ling, DNB Markets, Research Division - Senior Analyst Healthcare [25]

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24?

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Thomas Axelsson, Vitrolife AB (publ) - CEO [26]

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Not 24 embryos, you can run 24 dishes for a couple then or for culturing. What it is, is it is based on a situation where you do more mild stimulation, so you are not having so many oocytes to do the fertilization on. And it is then the number of wells that you have within a dish. So it is for markets where you do mild stimulation. So for instance, they do that a lot more in Japan. So compare that with U.S. where they're doing heavy stimulations, let's put it that way. And where there are cases where they take [results] for 25 eggs or even more, then this product would not be suitable for the U.S. market. So this is a market -- this is a product for clinics that have larger sizes that do mild stimulation in those cases. So it is product for mainly the Asian market and some larger clinics within EMEA.

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Operator [27]

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Your next question comes from the line of Victor Forssell.

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Victor Forssell, ABG Sundal Collier Holding ASA, Research Division - Analyst [28]

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I think most of my questions were answered already, but I have one last one on the Time-lapse segment. Is it possible for you to dissect the growth a bit more in the quarter? I mean last quarter, we had the large order from EmbryoScope+ to China. If you could sort of bridge out the growth in the different regions, but also in rough figures by the different systems, that would be great.

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Thomas Axelsson, Vitrolife AB (publ) - CEO [29]

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We are not going to disclose that, regarding our product. I can guide you like this then. We made an announcement last quarter regarding the China order because it was a product that we have been doing product development on. That was special also done for the Chinese market, it fits very well with the Chinese market and we got it approved. So to give guidance to the market and say that, "Okay, this is approved and we are starting to sell it in China." That's good guidance to you and the market. We are now starting also to sell EmbryoScope Flex. And the information then to you is that it is -- and you can see that it is a product that fits well into the Japanese market, and the same kind of answer as Patrik was asking about.

So you can see that the product range, having everything from single product, just one culturing, like the Primo, that is hardly being sold anymore, to the traditional EmbryoScope, EmbryoScope+ and EmbryoScope Flex is taking into consideration that the culturing therapy that's what you do. So the bigger clinics go for larger products, depending upon mild stimulation or not. And that's then, let's say, the guidance for in what kind of regions is it that they will use, what kind of product. And then size of the clinic, depending upon if they will go for the EmbryoScope or EmbryoScope+.

So expansion and product development that we are continually doing is to try to fit a product into the right customer segment, depending upon if they are doing Time-lapse as it is or if they do Time-lapse together with Genomics, or if they do Genomics with just some kind of selection due to Time-lapse to reduce the number of embryos that they will do biopsy on. So that's the kind of segmentation for different kind of therapies that we are working on.

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Victor Forssell, ABG Sundal Collier Holding ASA, Research Division - Analyst [30]

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Right, yes. And just a quick one on your current OpEx base. I mean how lean do you say -- would you say that it is currently? And what type of investments do you see for next year in terms of SG&A or R&D? I know you've been talking about R&D picking up a bit compared to your sales.

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Mikael Engblom, Vitrolife AB (publ) - CFO & IR [31]

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Yes. So we have been expanding our OpEx compared to last year, as you see in the numbers. And we've been adding resources in basically all functions. So in sales and marketing, we added resources. We've done acquisitions. We are strengthening administrations, such as quality assurance and IT. And we have also strengthened product development, Media development and the acquisition of AI technology and subsequent product development related to that. So we are strengthening in order to support future growth in all areas, and we expect that to continue. So we are building the company to match the increased expected demand.

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Victor Forssell, ABG Sundal Collier Holding ASA, Research Division - Analyst [32]

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Right. But you see you would expect some leverage to shine through in next year as well, some operating leverage from here?

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Mikael Engblom, Vitrolife AB (publ) - CFO & IR [33]

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Well, we haven't guided to have any like an improved EBITDA margin due to scale effects in OpEx. We have actually said that we expect R&D costs to increase somewhat in relation to sales over the coming years due to the different opportunities we see in product development, especially in research and development then. And so we're not expecting EBITDA margins to improve due to scale effects on the OpEx side.

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Operator [34]

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Your next question comes from the line of Arvid Necander.

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Arvid Necander, Redeye AB, Research Division - Analyst [35]

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Yes. Okay. And congratulations on a great quarter. I was just wondering if you could dig down a little bit deeper into the launch of RapidVit given that vitrification is perhaps one of the fastest-growing segments of the Media market. Do you expect this to have more of an impact in the upcoming quarters? Or is it not big enough of a product for you guys yet? Yes, just if you can provide some more color on that.

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Thomas Axelsson, Vitrolife AB (publ) - CEO [36]

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Good morning, Arvid. The vitrification market, as you say, is -- as we also believe, the quickest-growing market within the Media range. And the vitrification, the traditional vitrification products that we have for blastocysts, et cetera, and embryos is something that we have in most markets. In U.S., we have had some struggle to get the right clinical data through FDA, and we have been waiting on this.

The situation regarding then oocyte vitrification and how the market looks like, we have to take into consideration is that this market in oocyte vitrification, as we predict and the business predict and the clinics predict, is that it's going to be a growing market. One aspect in U.S. is the social freezing, and the social freezing is coming from U.S. as most of these trends.

Another thing is also an awareness from, for instance, the oncology side that when they start treatment, if there is any kind of risk for some kind of fertility treatment -- fertility problem as a negative outcome of the treatment, then they do -- then they first do, if it is a possibility due to timing, that they do and also pick up so they can save the eggs for future and, hopefully, fertility processes. So there are 2 trends behind it. It is not going to be an explosion, but if we compare with the growth between different kind of segments, the vitrification market, especially the oocyte vitrification market, are double-digit growth.

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Arvid Necander, Redeye AB, Research Division - Analyst [37]

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Okay. Yes, all right. And then just a last quick question. Do you feel -- given the results you've seen so far in the Genomics business unit and taking into account the growth you've seen in the other business units as well, do you still stand behind the guidance of Genomics having an impact of about 10% on the full year sales? Or do you see a reason to update that guidance?

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Mikael Engblom, Vitrolife AB (publ) - CFO & IR [38]

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Yes. I believe that we are, on the first 9 months, contributing with about 11% compared to the last year for the same period. So we are a little bit ahead of that guidance of 10% for the last -- for the first 9 months, but it's not a big variation. So we don't really see a need to change that guidance. But for the first 9 months, we are a little bit ahead of that guidance.

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Operator [39]

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There are no further questions at this time. Please continue.

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Thomas Axelsson, Vitrolife AB (publ) - CEO [40]

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Okay. If that's the case, thank you very much for listening in to our Q3 report. And by that, thank you from Mikael and myself.

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Operator [41]

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That does conclude our conference for today. Thank you for participating. You may all disconnect. Speakers, please stand by.