Good morning and welcome everyone to this second quarter and the first half-year 2026 financial results presentation for Vistin Pharma. My name is Magnus Tovetaug, CEO of the company, and with me today I have our CFO, Mr. Alexander Karsen. I will now go through the highlights. The revenue in the quarter ended at 100 million Norwegian kroners compared to 118 million in the second quarter of 2025. We had a significantly stronger Norwegian kroner compared to euro in the quarter of 2026 compared to last year, affecting the revenue in local currency. The revenue year-to-date ended at $212 million compared to $233 million year-to-date last year, a decrease of 9%. The EBITDA for the quarter ended at 22 million, Norwegian Kronos compared to 30 million in the second quarter 2025. The EBITDA of 22 million was positively affected by higher sales volume, however, offset by a weaker euro. So if you look at it, the currency neutral, the EBITDA decreased by approximately 2 million compared to second quarter of 25. The EBITDA year to date is 49 million Norwegian kroners compared to 60 million year to date last year. The earnings per share for the first six months of 2026 ended at 0.8 Norwegian krona per share compared to 0.91 in the first half of 2025. And in the first half of 2026, we had a sales volume of 3,100 metric tons, an increase of 8%, corresponding to 240 metric tons, compared to the first half of 2025. An ordinary cash dividend of a total 1 Norwegian kroner per share was paid in the quarter, corresponding to approximately 44 million Norwegian kroners. And as previously communicated in our first quarter presentation the main distillation vessel has reached end of its normal lifespan and will need to be replaced. It is planned in an extended bi-annual maintenance stop in the fourth quarter of four weeks for both manufacturing lines. The planned stock will typically impact the production and sales volume in the same quarter. Here we have a nice picture of our manufacturing plants in Norway, the sustainable production in the middle of the forest. It's a nice picture, it shows the facilities. In the front you can typically see the newest warehouse, that's the grey box with the white logo. In this plant five, six, forty feet containers it's coming in every week with the raw materials and the same amount of containers is leaving the manufacturing plants every week with the api to ludwig and brevik harbor to short sea to rotterdam and then long sea to the rest of the world and also by truck to all over europe so we produce 365 days a year 24 7 only interrupted by maintenance stops so it's a high-speed manufacturing plant very highly automated in this thing we are today a pure play metramine company supporting patients worldwide in a growing market. I mean diabetes is one of the largest health emergencies in the 21st century. Metformin is still used as the baseline treatment for diabetes type 2. Of course you have combinational drugs you can put on top but still the main use of type 2 diabetes is metformin. And then we still would like to say that we have a good growth opportunity in this market. We are one of the leading global producers of high quality metramine based in Europe. So if you look at the market demand for metramine, look for reports or market intelligence, you can see that it's still expected to have a compound annual growth rate of four to six percent on an annual basis according to the International Diabetes Federation and Vistin's global market share today is about 10% and we will also continue to be around 10% when we fulfill and fill our manufacturing plant with a new capacity that's because we are growing in a growing market. Here we see a picture of the number of millions of people living with diabetes today in the world. And 10% of these figures are typically diabetes type 1, where you get insulin, and 90% of these cases are diabetes type 2, where you typically get metformin as the baseline treatment. So it's really a lot of millions of people. 590 million people are estimated living with diabetes today so around 550 million have type 2 diabetes 3.4 million deaths per year and it's the health expenditure or expenditure on on diabetes is enormous it's estimated at around 1 trillion dollars this is a picture of the world map more or less showing a bit the same but you could say that idf the international diabetes Federation is expecting the number of patients with diabetes to grow with approximately 45% until 2050. So up to 850 million people expected to have diabetes in 2050. And you also have today around 650 million people in the world living with a pre-diabetes condition that can also be treated and diagnosed so it's really a pandemic here we see a typical snapshot of our export sales out of Norway all the way from US and Canada and Latin America in the west to Japan in the east we typically export and sell our API to mid-size and large-size reputable pharmaceutical companies who then transforms our API the active pharmaceutical ingredient into the drug product so today as far as we know we are sold and patients are using our api in more than 100 countries around the world we've had a long and successful track record here you see a graph of the revenue development since 2010 to last year and you can see the the jump in revenue in 2023 when we installed our new manufacturing line the year before it's nice to see that we have transformed the manufacturing lines into revenues. So I think with that I would like to hand over to our CFO, Mr. Alexander Karlsson, who will take us through the more details of the financial results.
Thank you Magnus and let's start with the sales volume. We had a sales volume of close to 1,600 metric tons in the second quarter, which is an increase of around 8% or 120 tons compared to the second quarter last year. Looking at the first half sales volume, we had around 2,860 metric tons in 2025, while this increased to 3,100 metric tons in the first half of 2026. Moving on to the revenue which came in at 100 million in the second quarter compared to 118 million in the second quarter last year. It had increased production volume has resulted in more volumes available sales which highly has transformed into actual sales. As Magnus mentioned the NOC has significantly strengthened against you in the second quarter which is affecting the sales in local currency. The average sales price ASP was lower compared to same quarter last year as we have seen the spot prices of metformin fluctuates with the global raw material prices and the raw material prices has been lower in the second quarter this year compared to same quarter last year. Another effect on the revenue in the second quarter is product mix and onboarding of customers in new regions which also influences the sale price. Year-to-date $212 million in revenue compared to 233 year-to-date last year. Gross margin 66 percent. The volatility on the raw material and freight prices due to the Middle East slash Iran conflict has been reduced during the summer. There are more as a stable state on raw material supplies. However there are still uncertainty around the moment in the second half of the year. EBTA of 22 million in the quarter on the positive side increased volume and a weaker USD compared to NOC which is positive for our raw material purchases. On the other side stronger NOC versus euro had a significant effect on the revenue and hence the EBTA. FX neutral EBTA decreased by approximately 2 million compared to the second quarter last year. EBTA margin came in at 22% in the quarter and the first half EBTA was 49 million compared to 60 million last year. Going a bit more into the details in the income statement, we have had a look at the revenue and earnings before interest, taxes and depreciation and amortisations. So we can look at depreciation, 6 million an increase around five, six hundred thousand NOx compared to the same quarter last year, driven by more capital assets slash investments we have done. Looking at the net finance, we had an income of 2 million compared to an expense of 1.2 million, same for last year. And this year's income is driven by current hedging contract in euro. As previously communicated, we do use forward hedging contracts on a portion of our sales to net out the potential volatility in the currency rates. Net profit came in at 14.1 million compared to 18.5 same quarter last year. Well year to date the net profit was 35.6 compared to 40.2 and that gives an earnings per share of around 0.8 versus 0.91 for the first half of 2025. Looking at the balance sheet, total non-current assets of around 232.4 compared to close to 240 to last year. This is mainly the building machines equipment at our plant in Kragerø. The small decrease is given that we have had higher depreciations compared to what has been invested in the period. Looking at the current assets, there's a small decrease in inventory. we have slightly higher safety stock of raw materials compared to last year and slightly less finished goods. There's an increase in the receivables and that's driven by that a significant part of the second quarter sales was shipped out and invoiced in June. So we expect that to go down somewhat for the coming months. That gives total assets of 434.7 million compared to close to 422 last year. Having a look at the equity and liability side of the balance sheet, equity increased to close to 320 million compared to 294.3 last year and that's even with the dividend payout of 44 million in the quarter which decrease the share premium. Total long-term liabilities 33.3 compared to 22.3 last year and for the short-term liabilities 81 million compared to 105 last year. We have a net debt at the end June of close to eight million and they're also available credit facilities if needed. That brings also the equity and liability side of close to 434.7 compared to 421.7 for the same period last year. So with that Magnus I'll give the word back to you.
Thank you Alexander. I will now go through a summary of the presentation. We've had a second quarter revenue of 100 million Norwegian Kronos with a corresponding EBTA of 22 million, so a 22% EBTA margin. We've had a sales volume of 1,580 metric tons in the quarter and the 3,100 metric tons year to date, an 8% increase compared to the same quarter last year. We managed a gross margin of 66%, even with significant negative currency effects compared to the same period last year. So it shows a good commercial execution. In this thing, we have built significant safety stock of critical raw materials over the past quarters, which is mitigating potential supply chain interruptions due to the Middle East conflict. Compared to a pre-Hormus situation, increased freight and raw material prices are expected of it going forward due to this Hormus situation. So typically, in turn, this influences also the global metformin prices. The long-term renewable energy supply agreement that we have signed with Southcraft until 2032 provides predictable power prices irrespective of market volatility. So this secures 100% green renewable hydropower long-term with a very favorable carbon footprint compared to other metramine suppliers Far East. Within sales and the marketing team, we are actively working in new regions to offer our products and onboard new customers to fill our manufacturing capacity. The global metamine demand is still expected to grow by an underlying growth of 4% to 6% per year. The main desolation vessel in production has reached the end of its normal lifespan and will need to be replaced. This is planned in an extended biannual maintenance stop in the fourth quarter over four weeks where both lines will be idle. So the planned stop will impact the production and sales volume in the same quarter. We normally don't guide, but since the stop in the fourth quarter is relatively large, we find it fair to our investors to inform about this up front. And we also informed about this in our first quarter report. In VisThin, we are continually working for improvements and growth opportunities and have started also to look for ways to further increase production capacity and, of course, improve unit costs. We are strategically well positioned, as many European clients prefer high-quality supplies, near-shore production and an attractive ESG profile using renewable energy with an extremely low-carbon footprint. And an ordinary cash dividend of one Norwegian kroner per share was paid out to shareholders in June, corresponding to approximately 44 million Norwegian kroners. And with that, I think we're done with the presentation and can open up for questions.
Operator
Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. If you wish to ask a question via the webcam, please type it into the box and click submit. We currently have...
Oh, sorry, sir. just please go ahead we currently have no phone questions i will now hand back to the speakers for webcast questions okay so we are looking into the list of questions here the first one is a nice one says congratulations with the steady state production and sales in the first half year of 2026 thank you very much the first question is metformin DC 95% our new product whether what is the status and timeline for the first commercial sales and is the margin expected to be higher than for standard metformin HCL well the first of all the DC 95% is ready now for commercial sales we are working actively with new leads around the world but as you know in the pharmaceutical business things take time you send samples to customers they need to qualify your dc grade and then file the dc grade to the authorities etc so things take a bit time but basically the first commercial sales of 95 5% DC is ready by end of this year or 2027? The second question is maybe you can take that one Alexander?
It's the how much of the 2026 ASP meaning average selling price decline is due to lower market price versus customer and product mix. I would say 70 to 80% is the lower market price. As you see if you go into more details in the operational cost line you will see that also a significant decrease in raw material prices both in the first half and the second quarter compared to last year and that's correlated to what we see that raw material go down and also the metformin price goes down. We also are actively looking into new leads and customer around the world to fill the capacity of the plant and it's normal to have some kind of introduction prices to onboard new customers. As we said, it did have some effect on our ASP in the second quarter.
Yeah, there is a third question from the same investor. The distillation vessel. Will the new vessel be light for light replacement or will it increase capacity or reduce energy use and cost per kilogram well it is basically a like-for-like replacement however the project around the installation is also going to increase the capacity for the the butanol so it's both increasing our options for the capacity on the butanol but also basically a like-for-like when you look at it from an equipment perspective the energy use and cost per kilogram. I don't know, Alexander, whether you have any comments to that, but I think it's probably like-for-like.
The replacement is like-for-like, but it will give some cost benefits on suppliers for a bit of an oil and a bigger tank, so we can reduce the number of fillings. So it will give some cost benefits. Just also another question on the cost of the capex to replace this installation unit and it's not very huge it's more the job because it's a big tank that's going into the plant and the capex is less than five million to the installation and everything.
Another question here it's about capacity and unit cost we state that we are looking for ways to further increase production capacity and per unit cost what specific opportunities are you evaluating what potential capacity increase and cost reduction per kilogram could these initiatives deliver well so we are i mean uh improving first of all improving unit cost is bread and butter when it comes to a manufacturing company like ourselves so that's a continuous improvement also regarding opix savings and looking at the how let's say the um working processes in the manufacturing plant and in the organization can be done when it comes to the statement we can also say that we have started to look into some r d feasibility studies where we look upon how we can utilize and improve our chemical process in a smarter and better or better way there are always options to look into that stoichiometry it can be what type of raw material qualities we can eat and use in the process etc without affecting the quality of the API but as you know as a high quality premium API supplier we also need to make sure that every change we do or plan is making sure that the API coming out of the plant is the same quality as we are famous
for yeah in addition i would add that if you kind of break down our biggest cost buckets you have raw materials and personnel costs in addition for the pure operational cost it's electricity where we have the stock class contract it's the water and sewage cost where we had a really great project two years back where we now reuse 80% of our water used for cooling down reactors and that was a product that is less than three years payback and we save around five million years and the last big cost buck is is really waste that come out of production and that is something we look at because today we have to store this in tanks and drive to places where it has to be stored. It's rather expensive so there we are looking if we can reuse some of that, can it break it down so it's less toxic etc. That's something initiatives we're working on that can be really positive on our OPEX in a couple of years ahead.
There's another question here about an update on the 15% ownership of the CFRMA if we can elaborate a bit on the planning there what what are the plans well the ownership in CFRMA first of all gives us a good access to management of the company and what we can say is that we are actively looking into some cases together with chief management currently but we're not going to guide anything about the outcome of that um there is a there is a question whether we can publish the metformin prices on our home page well i think um i don't think we're going to do that because it is extremely difficult to predict metformin prices because you have prices of metformin on the spot market varying very much depending on the type and quality and the region of the world for metformin. So I think if you want to look at metformin prices, what we can say is that there are databases out there that you can get into, either payable or not, where you can see the trends on the metformin prices. So are but which one is exactly the correct and whether that is corresponding to the prices that we have in this in pharma that's uh that will be up to the investors to to to get so say we will let's say our prices of metromene will be shown in the the figures that we show every quarter there is a question which new regions in the sales and marketing team working with and will this sale influence and how will the sales influence it great question um we are have been working very actively the last I would say the last year because we need to fill the capacity of the manufacturing site so the the regions where we already now have been able to acquire I would say three to four new customers is the Nimiya region and the Middle East we also establish new customers in the Latin America and then we are very briefly also exploring started to explore some opportunities in sub-Saharan Africa whether it will influence how is the pricing is the question well when you are onboarding new customers first of all you need to convince them why they should spend one year and a half to qualify you as a supplier and of course you need to have competitive pricing to be able to be considered as a new supplier so but it depends the pricing will also depend on whether the customer just wants to have a plain methamene without any extra features or whether the new customer is interested in extra features like analysis like extra release tests like documentation or safety stock so that is also influencing the the pricing and that As Alexander mentioned in the financial figures, the product mix is also, from quarter to quarter, is also influenced by the amount of extra services per material number.
I think with that, we have answered all the questions. And thank you for listening. And we can now close the call.
