Thank you, Operator, and a warm welcome to everyone joining us for Back to Guard's second quarter presentation for 2026. I'm joined today by our CFO, Patrick Buck, and I'll take you through the quarter's strategic highlights and then hand over to Patrick for a closer look at the numbers before we open the line up for your questions. Today's title, Solid Performance Driven by Revenue Growth, captures exactly where we landed this quarter. Strong top-line momentum across the business, confirming that the slower start to the year was simply a matter of timing rather than any change in trend. So let's dive straight into the quarter. And let's start with the numbers. We're pleased to report second quarter net sales growth, excluding currency, of 16%. The main driver was a recovery in BD revenues alongside one of the strongest quarters our wound management portfolio has ever recorded. This quarter confirms that the softer start to the year was a matter of timing, not a change in trend, as I said, and our strategy execution is on track. Adjusted EBITDA came in at 5.6 million SEC, up from SEC 4.4 million a year ago, lifted by sales growth and continued cost discipline. It's a good illustration of how top-line growth flows through to earnings in a scalable license business, and it gives us room to keep investing in future growth. Cash flow from operations amounted to $12.4 million, a clear step up from the $1.7 million in the same quarter last year. Strategically, it was an eventful quarter too. We signed a new long-term agreement that deepens our already 35-year partnership with BD. We're seeing growth in the use of patients of VactaGuard-coded implants with Zimmer Biomet, and we had strong momentum in our early partner dialogues. Let me take you through these one at a time. Let's turn to BD. In May, we announced a new long-term agreement with BD, deepening a partnership that goes back to 1990, more than 35 years. Few things illustrate the long-term value of our coding technology that creates for partners better than this, or how embedded back-to-guard-coded products become in patient care once adopted. What started as a collaboration covering select markets has steadily grown into a true global partnership. Today, it spans the full value chain from technology development to global market execution and is focused on expanding adoption of our infection prevention technology. The restated agreement modernizes the partnership terms and strengthens that foundation further. It builds on the December 2023 extension, under which BD was granted worldwide exclusivity for back-to-guard-coated foley catheters outside of China. Alongside the commercial terms, a key part of the agreement has been aligning on the regulatory approvals needed to support smooth market transitions, something that's been a shared focus with BD over the past two years, and that has now enabled recent launches in the Nordics, Poland, and parts of the Middle East. We have backed each of these commercialization initiatives with technology training across the regions, and we continue to transition our KOL relationships and former customers to support market access and commercial execution for BD. As I said when we announced the agreement back in May, this is a great example of the power and potential of our license-focused strategy, a partnership that's global, growing, and built on shared success. In the quarter, BD revenues came in 50% above the week's second quarter of last year and are also up 8% so far this year, reaching $28.2 million on a reported basis. As in prior quarters, BD revenues are shaped by the timing of concentrate shipments into their supply chain, which can create variation from one quarter to the next, but we continue to see underlying growth, both from existing and new markets. Now to Zimmer Biomets. Our partnership continues to focus on driving commercial adoption. FaktiGuard is leading the work to transition the trauma implants to the MGR regulatory requirements in Europe and supporting the post-market clinical studies. We are very pleased to note that the first of the ongoing multi-center studies is now complete, which is an encouraging step, and the key comparative study is progressing according to plan. We are especially pleased to see growing use of back-to-guard coded implants in patients. There is still meaningful headroom here, given how small a share of the total trauma market coded implants represent today. Overall, we see the partnership as financially stable with revenues of 3.8 million in the quarter in line with our expectations, double digit growth in product sales and clear long-term potential as adoption continues to build. Let's turn to business development. We spent a good part of the quarter on new business development, meeting potential future partners at conferences and in direct discussions across the U.S. and Europe. Since launching our five focused therapeutic areas back in March of 2025, we have now completed a full annual calendar of conferences across all of them, where we focus on business development activities. The need to find infection prevention solutions is especially recognized in orthopedics, and it is clear that the strongest engagement with Back to Guard is here. We are also enabled to capitalize on this category by having rights in various orthopedic segments available for licensing since amending our agreement with Zimmer Biomet at the end of 2025. We remain focused on advancing these discussions with potential partners while recognizing that in a licensed business, dialogues like these can take time to mature into signed agreements. Now to wind management, which had a standout quarter. The portfolio delivered very strong performance indeed, with 67% revenue growth for the quarter and 25% over the first six months. Our flagship Hydrosin Aqua line led the way, supported by stabilization in sutures, with growth in the portfolio across the Middle East, Europe, and Asia. Tender business in select regions also gave a positive boost in the quarter. Alongside the strong commercial execution, we continue to strengthen the product portfolio, invest in availability of products in new markets, and build out our operational setup in Malaysia. As we've said before, we continue to expect double-digit growth from the combined boon management portfolio, fueled by high double-digit growth from Hydros and Aqua and a stable contribution from Sutures. And this quarter confirms that we continue to be on track. With that, over to Patrick for a closer look at the numbers.
Thank you. Thank you, Christine. We are very happy to present solid growth this quarter. For Q2, we report both revenue growth, continued profitability, increased cash generation, and we see positive momentum across the business. Total revenue came in at 57 million sec, up from 52. Total revenues grew 12%. Net sales grew 16%, excluding currencies. As I said, this is driven by strong growth in BD revenues and a very strong quarter from our management portfolio. In fact, the strongest quarter and the strongest revenues on a rolling 12-month basis ever. Looking closer at our core licensed business, we see licensed revenues lifted by the strong growth in BD, which came at $28.2 million. This is up 50% versus a weak second quarter last year, but up 8% versus the first half of last year. And as I said, we see strong continued underlying momentum in the BD business and the BD partnership. Simma Biomed contributed with approximately $4 million in the quarter in line with our expectations and reflecting in fact a double-digit growth in the sales of the CNN Bechtigard coated nails. The reason for the decline in the total license revenues is found in the high comparable on Simma last year, in which Q2 included a full year of minimum royalties from the previous As communicated, fixed fees in our new agreement will be consistent across the quarters going forward. Across both partnerships, we continue to see positive in-market volume growth and we are excited to see the future demand from customers and clinicians for our technology, which underpin and adds to the risk reduction efforts healthcare professionals must deal with on a daily basis. On OPEX, we remained cost conscious and with cost discipline during the quarter while also investing selectively to support growth. This includes, for example, within our regulatory capabilities, within business development activities, as well as strengthening our teams and operations globally, including in our Malaysian business. For the quarter, we did see an increase of total OPEX of 11%, while the half-year period holds about a 1.5% total increase in OPEX. The Q2 increase mainly pertains to timing effects on bonus accruals, which was reversed in Q1 2026 versus Q2 last year in 2025, i.e. a lower comparable for our Q2. As communicated previously, we will continue to operate with the cost discipline while ensuring the right investments in growth. On adjusted EBITDA, we came in close to 6 million for the quarter, up from 4.4 million in Q2 last year, driven by sales growth and a set continued cost discipline. Our margin on adjusted EBITDA increased to 10% for the quarter, as well as approximately 10% for the first six-month period. Net profit for the quarter was minus 8.2 million, in line with the 8.1 million in Q2 last year. On cash flow, we see cash flow from operating activities amounted to a bit more than 12 million for the quarter, a substantial improvement of more than $10 million versus the $1.7 million in Q2 last year. Also, total cash flow for the period was positive at $7.4 million. And our total cash and cash equivalents at the quarter end amounted to $43.5 million, up from $35 million approximately at the end of Q1. So with that, back to you, Christine.
Thank you, Patrick. With growth across all of our businesses, including double-digit increase in wound management, our focus now is on converting these investments into sustained traction. We are on the right track, and we will keep executing towards our strategic targets. I want to be clear that nothing about previous quarters changes our strategic direction or the fundamentals of the business. Our targets for 2030 stand unchanged. We remain focused on strengthening our partnerships, continuing to invest in our key knowledge areas that help advance our partners through regulatory approvals and to commercialization, and building long-term value through disciplined execution across the portfolio. To sum up, this was a quarter of broad-based growth with net sales up 16% and further improvements in both EBITDA and cash flow. We renewed and deepened our 35-year partnership with BD, and we continue to see growing momentum with Zimmer Biomet with double-digit growth in product sales as coded implant use in patients' builds. Wound management delivered one of the strongest quarters ever, up 67%, and we have a strong partnership pipeline building, particularly in orthopedics. Taken together, we remain firmly on track. With that, let's open up for questions.
Operator
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Maria Carlson Osipova from DNB Carnegie. Please go ahead.
Hi, Christian and Patrick, Maria here from DNB Carnegie. Thanks for taking my questions. Great quarter, so congratulations on that as well. uh some questions however on the cogs level historically we've seen some lumpy gross profits and we see cogs increase in this quarter how should we think about the gross margin profile going forward i mean this is mostly a wounded portfolio effect but still what do we see going forward yeah thank you maria for your question uh you're absolutely right we have seen historically a bit lumpy Cox profile.
We obviously try to have it less lumpy going forward. I think what we see in Q2 is not the same picture you will see going forward. Part of what drives the Q2 is product mix. We saw a higher sale of wound management, obviously with the high growth on wound management and we've also had some additional scrapping in Q2 so going forward I think you can assume the level that we have seen consistently in the past periods all right thank you and talking about wound management is this high growth repeatable I mean you mentioned the highs in a double-digit growth there in human also mentioned tender business positive boost is there any proportions that you can talk to us about i think uh in in in short we would love if we continue to report uh plus 50 60 growth for management uh but that i think is is certainly not our expectations to the business uh as we've said before we have a confident long-term view on the business to deliver a sustained double digit growth that includes both the hydrogen part of the business and the sutures business combined as we've said before we see the sutures business more as a stable business whereas in in our hydrogen portfolio we see continued high double-digit growth which we expect going forward i think with this quarter obviously we we have continuous confirmation that we see positive demand by by customers obviously from our distributors of the hydrogen portfolio and And as we've said, we have seen a stabilization of the sutures business this year, which affected us a bit last year. So we have a continued positive view on the growth coming from our Malaysian-based wound management business. As we've talked about before, we see growth across the regions, notably from the Middle Eastern region, from Europe, as well as our legacy markets in Asia.
All right, and just a little more focus on costs. The MDR spend, have you guided previously on what do you expect the total MDR expenses to be? What should we wait in the second half of the year? And maybe some timelines, how long are you planning to carry the work with the MDR?
Yeah, I appreciate your question. I think in short, no, we have not guided regarding that for the full year we have this year an increased amount of non-recurring costs that we can single out that relates to mdr this is what we this is what we highlight in the report in the adjusted EBITDA as related to mdr costs we have highlighted in that that we see this potentially in 26 and 27. I do believe that we will see more cost and the majority of the cost in 26 versus 27 and we're halfway through the year but we don't have a specific guidance on the total number of costs but we will obviously continue to incur costs that are MDR related and that we see non-recurring also in the remaining Q3 and Q4 of this year, certainly. Obviously, in addition to these regulatory costs, we have normal regulatory costs in our business, which we obviously do not single out, but we will continue to report these MDR-related non-recurring costs in the report for Q3 and Q4 as well, obviously.
And Maria, this is Christine. From a qualitative standpoint, we can also comment that with BD, the underlying Foley product portfolio has already been upgraded to the MDR regulatory guidelines, so that product portfolio is complete from an MDR standpoint and is approved and is currently regulated under MDR. And we are currently working on both the transitions of the Zimmer Biomat trauma implants as well as the portfolio for our wound management portfolio, all of which are, of course, device-related under the MDR regulations.
All right. Thank you for the addition there. That was all my questions. Thank you very much. And yet again, congrats on a good quarter. Thank you.
Operator
The next question comes from Matthias Vatsten from SEB.
Please go ahead. thanks for my questions uh i think it was good to see the bd revenues normalizing this quarter a quite good step up from q1 i just want to ask if you would say this represents the sort of run rate you're at right now and with no specific item either helping or or carrying it down and if we are likely to see lower volatility in the bd revenue line going forward or if the volatility will still be there, based on your understanding.
Yes, thank you Mathias for your question. We are of course also very happy to be able to report numbers that I think sustain what we have communicated is a very solid and positively underlying growing partnership and momentum for BD. um what what we have stated and obviously what we've talked about in the past quarters is that we did see an effect of of some of the delayed registrations uh in europe um we we believe and we of course uh work uh as as much as we can to ensure that will be less volatility going forward uh so that is what we expect that is what we hope that is what we focus on matthias um what you see in in the q2 uh for this quarter is obviously more similar to to q3 and to q4 of the last year um which were as we also reported as more normal quarters so i believe yes in short this is this is about sort of the level that we are very happy to see from bd and from there on of course we we still continue and expect to grow but we do expect sort of less volatility going forward but of course it's it's uh sometimes out of our hands we're not able to glide fully on this but as we said before we see continued positive underlying growth in the bd business with mid single digits at least for the sort of volume volume growth in the markets and as christine also communicated we see a positive response from many new geographies uh preparing already sort of having products available uh with back to god codifolis in in in sort of bd's markets that's a very clear answer and the next question relating to biddy would be what share of the revenues there that are new new markets sort of outside us japan etc do you have that level of insight um thanks for your question matthias just to understand so what share of revenue is in the new markets that they will uh potentially or have launched in versus the existing markets yes such as india and europe that were added to the agreement you had before we did it um i mean in in short we don't have sort of their uh or the split uh on these markets and i think in fact which is what obviously we and pd are trying to do together is is not to necessarily capture market share from uh from from existing other of coated catheters this this rarely exists but to rather build the markets we know today that obviously the existing markets with us being the biggest has the biggest potential so of course we're trying to build a lot of additional markets that in in size will will will not obviously be bigger than than the existing business and it will take time but this is this is the work that we are committed to and that BD is committed to, and we see very positive response from these markets that have not had coded catheters available before. And we see positive response from their sales teams that they would like to offer this to their customers and to the patients ultimately. So we believe that the additional markets that obviously we have now under the new global agreement will definitely sustain positive growth for BD going forward. But obviously, for the foreseeable future, it will still be a lesser portion on the total revenue base versus the existing markets.
Those were the questions I had today.
Operator
There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.
Thank you, Operator. Thank you for all your questions and for your continued interest in VectorGard. We appreciate the dialogue and look forward to updating you at our next available opportunity. And with that, back to you, Operator, for closing out the call.
