Bonesupport Holding AB (publ) ($BONEX)

Welcome to BONESUPPORT Q1 2026. [Operator Instructions] Now I will hand the conference over to CEO, Torbjorn Skold; and CFO, Hakan Johansson. Please go ahead.

Thank you, operator. Welcome, everyone, to BONESUPPORT's Q1 2026 Results Call. My name is Torbjorn Skold, CEO of BONESUPPORT. With me here today is our CFO, Hakan Johansson. And together, we will use the next 25 minutes to guide you through the Q1 presentation and then open the line for questions. Before starting the presentation, I would like to draw your attention to the disclaimers covering any forward-looking statements we will make today. So let's look at the financial and operational highlights of the quarter. Q1 was another strong quarter with solid execution across the business. Net sales came in at SEK 324 million, corresponding to a growth at constant exchange rates of 31% versus Q1 2025. Reported growth was 14%, showing that there was a continued strong currency impact on our figures for the quarter. Our adjusted operating result, excluding incentive program effects, was SEK 85 million, corresponding to an adjusted operating margin of 26%. Reported operating result was SEK 72 million. We saw another quarter of solid cash generation with operating cash flows reaching SEK 75 million, resulting in a cash position of SEK 455 million at quarter end. We continue to see strong traction for CERAMENT G in the U.S. with sales reaching SEK 222 million for the quarter compared with SEK 178 million in Q1 2025. The sequential CERAMENT G growth quarter-over-quarter of USD 2.6 million was the strongest ever. In Europe and Rest of the World, we saw strong momentum across all markets with a growth of 16% at constant exchange rates compared to a very strong Q1 2025. Notable was also that our first CERAMENT sales in India were achieved during the quarter. During the quarter, the regulatory process for CERAMENT V progressed according to plan within the framework of the De Novo process. As communicated in early December, the FDA submission for CERAMENT V was transferred from a 510(k) pathway to the De Novo process in close dialogue with the FDA. If granted market authorization, CERAMENT V will constitute an entirely new product category like CERAMENT G did in 2022. Just as in the review of the De Novo application for CERAMENT G, both CDER, FDA's Center for Drug Evaluation and Research and CDRH, Center for Devices and Radiological Health are involved and the lead review team, which sorts under CDRH remains the same as during the 510(k) process. BONESUPPORT has received questions within the scope of the De Novo process and is working purposefully to address the requested details and clarifications. Responses are to be submitted no later than end of August. We are progressing with the early-stage launch of CERAMENT BVF for spine in the U.S. in line with plan. The introduction in spine is an important step as we continue expanding our portfolio of indications and applications. Now let's move on to the sales development. Next slide, please. The chart shows total last 12 months reported sales in Swedish krona by quarter since 2019 in stacked bars per region and product category. As you can see, the launch momentum for CERAMENT G in the U.S. is exceptionally strong. Given that we keep bringing new strong clinical studies and opening up new market segments and new indications, a product like CERAMENT G will remain in launch phase for many years to come. However, throughout 2025 and in the first quarter of 2026, we have seen strong influence from the U.S. dollar to Swedish Krona depreciation, which influences the optics of the graph, but not the end market performance, as you will see in Hakan's slides later in the presentation. Last 12 months growth in Q1 of 22% in the graph corresponds to an even stronger 35% at constant exchange rates. So the quarter-over-quarter slowdown in last 12-month sales is mostly due to strong currency impact. U.S. CERAMENT BVF last 12-month sale was flat year-over-year at constant exchange rates. In total, antibiotic eluting CERAMENT grew with 48% last 12 months in the quarter at constant exchange rates. Next slide, please. In U.S., sales amounted to SEK 267 million, representing growth of 35% at constant exchange rates. We continue to experience strong growth of CERAMENT G, driven by both increased access through new accounts and new surgeons as well as wider adoption among existing users. We see growth from all 3 prioritized platforms, foot and ankle, trauma and arthroplasty. At the American Academy of Orthopedic Surgeons Congress in March, presentations and discussions confirm the strong clinical interest in the CERAMENT platform and the commercial momentum in the U.S. Dialogues with surgeons and distributors show that CERAMENT G is perceived as a clinically relevant and practically useful solution in a broad range of procedures where there is a need for combined bone healing and effective infection control. During the quarter, clinical evidence was further strengthened through the publication of positive data for CERAMENT G. In February, the first U.S. clinical pilot study in trauma was published describing surgical technique and treatment results with CERAMENT G. The study conducted at the U.S. Level 1 Trauma Center and published in OTA International provides practical and real-world insights into how CERAMENT G is used in clinical practice in the U.S. Additional support was added in March through the first U.S. clinical case series focused on infection prevention in open fractures. By demonstrating how local antibiotic release can be combined with existing surgical techniques, the study highlights the clinical relevance CERAMENT G has within a segment with a high risk of infection. Despite the limited scope of the studies, they are of great practical importance as they provide concrete support regarding application techniques and expected outcomes for surgeons introducing CERAMENT G into their daily clinical practice. As part of our ambition to modernize an outdated standard of care in the U.S., we have successfully opened one market segment after another, starting with foot and ankle, followed by trauma and now moving into arthroplasty. Interest continues to grow for CERAMENT G in revision arthroplasty and periprosthetic joint infections, 2 areas where the clinical needs remain substantial and where the evidence supporting our antibiotic eluting technology has resonated strongly with surgeons. We have built a solid foundation for our spine strategy over the past quarters by establishing distributor coverage and preparing the market. In Q1, we continued the early-stage launch of CERAMENT BVF in spinal procedures with distributors now actively engaging spine surgeons across both existing and new partnerships. The surgeon access and early stages of adoption in spine follow plan and indicate the strength and potential of this segment. As this is a new clinical segment for us, more clinical data is needed to support broader market penetration. Importantly, the performance of CERAMENT BVF in spine will help confirm the value proposition for the CERAMENT platform, which will pave the way for the future antibiotic eluting CERAMENT launch. We've made strong progress in evaluating and preparing the regulatory pathway, and we'll share more on the path forward at our Capital Markets Day this spring. After Q1, U.S. CMS, Center for Medicare and Medicaid Services announced a proposed ruling, full year '27 IPPS in-patient prospective payment system, including changes that improve payments for the use of CERAMENT G in the treatment of complex orthopedic infections, such as periprosthetic joint infection, fracture-related infections and diabetes-related bone infection. In parallel, CMS proposes the introduction of more specific procedure and identification codes for CERAMENT G and CERAMENT V consistent with the company's submission. CMS also proposes new technology add-on payment, NTAP reimbursement for CERAMENT V effective October 1, 2026, provided that FDA grants the company's De Novo application by April 30, 2026. If FDA approval is obtained at a later point in time, we plan to submit a new NTAP application with a potential for additional payment from October 1, 2027. Although this is a proposed ruling, this is very positive for BONESUPPORT as it validates the uniqueness and value CERAMENT brings and reduces the potential financial barriers for using CERAMENT in daily clinical practice. The company intends to submit additional clarifications to the CMS during the ongoing 60-day public comment period. A final decision from CMS is expected in late summer 2026. Now let's turn to Europe. Next slide, please. Sales in EUROW came in at SEK 57 million, representing 16% growth at constant exchange rates. This is compared to Q1 2025, where we saw strong growth in EUROW, thus a very strong comparative quarter. We saw strong development across our 3 market structures, direct, hybrid and distributor markets. In our direct markets, the U.K. continued the recovery we saw during the fourth quarter of 2025. Our investments in hybrid markets developed well, underlining clear continued potential ahead. In our distributor markets, CERAMENT was launched as planned in India with a focus on the private market. We note some uncertainty in the Middle East, where geopolitical unrest is affecting market presence and logistics in the short term. Now I'll leave a deep dive into the numbers to Hakan.

Thank you, Torbjorn. Net sales improved from SEK 284 million to SEK 324 million, equaling a growth of 14% in reported sales growth or 31% in constant exchange rates. Torbjorn has already spoken about the solid performance in especially the U.S. and the major drivers behind the sales growth. But as the large movement in U.S. dollars compared with the first quarter last year somewhat hides a continued strong trajectory in the U.S., I would like to share the U.S. sales performance in U.S. dollars. CERAMENT V is the growth driver in the U.S. and this slide shows the quarterly CERAMENT V sales in the U.S. in U.S. dollars. And what we can note is an all-time high sequential growth resulted in accelerated growth in sales per workday. The contribution from the U.S. segment improved by SEK 25.5 million versus Q1 2025 and amounted to SEK 122.7 million. The improved contribution relates to increased sales after the effect of increased costs. Selling and marketing expenses during the quarter amounted to SEK 128.4 million compared with SEK 121.6 million previous year, of which sales commissions to distributors and fees amounted to SEK 85.1 million compared with SEK 78.8 million in the same quarter last year. From the graph at the bottom of the screen, showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin remains stable and strong at 94.5% with a minor decline in the period following a gradual impact from tariffs. In Europe and Rest of the World, a contribution of SEK 12.7 million was reported to be compared with SEK 15.4 million previous year. Selling and marketing expenses increased by SEK 6 million, mainly related to the previously communicated commercial investments in the so-called EUROW Booster program. From the lower graph and the orange marker, a minor improvement in gross margin can be noted, mainly impacted by market mix. Selling expenses, excluding sales commission and fees, increased by SEK 11.6 million, following commercial investments in both the U.S. and Europe, but also related to high intensity in terms of marketing activities. Research and development remained at a stable level and focused on the execution of strategic initiatives such as the application studies in spine procedures and the market authorization submissions for CERAMENT V in the U.S. And finally, administrative expenses, excluding the effects from the long-term incentive programs, remaining stable with an increase of SEK 1.4 million in the period. The adjusted operating result amounted to SEK 84.9 million with only minor currency effects impacting. I will come back to this on a later slide. The newly introduced tariffs in the United States had gradual impact on costs in the quarter. The full effect of a 15% tariff will equal an impact of 0.8 percentage points on U.S. gross margins, and this will come gradually with full effect later in '26. The difference between adjusted and reported operating results are costs regarding our long-term incentive programs amounting to an expense of SEK 12.8 million in the quarter compared with an expense of SEK 10 million previous year, as you could see on the previous slide. The increase in expense include SEK 1.6 million related to the long-term incentive program approved by the AGM in May '25, which was included in the accounts for the first time this quarter. Operating cash flow was strong in the period, partially supported by inflow of customer payments deferred from December to after the holiday season. During the period, the Swedish krona has experienced volatility against the U.S. dollar with a minor weakening towards the end of the period and with only minor exchange gains and losses reported as other operating income and expenses. The graph on this slide shows with gray bars how the relationship between the U.S. dollar closing rate and the Swedish krona has varied over time. This is read out on the right I axis. The blue dotted line read out on the left I axis shows adjusted operating result. The adjusted operating result, excluding translation exchange effects is the orange line and gives a more comparable view on the underlying trend in operating results. In the table below the graph, you can see that the FX adjusted operating margin of 25.5% in the period compared with 22.6% in the same quarter last year. In the shorter term, the operating margin is impacted by the commercial investments made in both EUROW and in the U.S. A gradual return to improvement in operating margin is expected as these investments are assumed to have positive impact on future sales growth potential. The relation between the U.S. dollar and Swedish krona has been stabilizing over the last 4 quarters, which becomes visible when comparing the adjusted operating result, including and excluding translation exchange effects on a rolling last 12-month basis. By the reported figures in Q1 this year, it is noticeable that the difference between including and excluding translation exchange effects is becoming narrower following a more stable relation to the U.S. dollar. The strengthening of the Swedish krona over time impacts both net sales and operating results as visible in the graph. A solid cash conversion has been reported continuously since third quarter 2024 with an average cash conversion of 81%, visible as the dotted line in this graph. Q1 this year reported ahead of the average, mainly due to the previously mentioned timing effects from customer payments. And with this, I hand back to you, Torbjorn.

Thank you, Hakan. So to summarize Q1 2026, sales grew by 31% at constant exchange rates, reflecting steady and consistent progress. Highlights were sequential CERAMENT G growth in U.S. of USD 2.6 million, EUROW growth versus a strong prior year of 16% at constant exchange rates and record strong cash flow of SEK 75 million, underscoring the strength of the business and its scalability. I'm convinced that the most exciting part of our journey in BONESUPPORT still lies ahead of us. And as I said, to provide a clearer view of what that journey will look like, we will host a Capital Markets Day in Stockholm on the 26th of May this year, which you are, of course, all welcome to join. Now with that, we're opening the line for questions. Thank you.

[Operator Instructions] The next question comes from Kristofer Liljeberg from DNB Carnegie.

Three questions. First, on the increased selling expenses here in the quarter. Would you say that you have reached a new level now? Or should we expect them to continue to increase sequentially? And related to that, how you think about the operational leverage here going forward? I noticed underlying EBIT has been more flat here sequentially. So would you expect it to pick up again here in coming quarters? My second question relates to the sales commission in the U.S. that seems to be down as a percent of sales. I noticed they are flat sequentially despite higher sales. If you could explain that? I know there's other variable costs included in that maybe as well. And then when it comes to the De Novo process for CERAMENT V in the U.S., if you could maybe explain a little bit what type of questions that FDA has and why you sound so confident that the product will eventually be approved and the risk of not receiving an approval?

Thank you, Kristofer. I will start answering the first 2 questions, and then I will hand over to Torbjorn to answer the question on the De Novo process. So let's start with the increased selling expenses. And again, as we have communicated also previously, we will continue to do gradual commercial investments if we believe that this is beneficial to sales growth. And on that theme, we have been both investing in the so-called EUROW Booster program, but we have also continued to strengthen our U.S. organization in terms of medical education activities, national accounts management and also more sales-related functions, et cetera, to continue supporting the growth and the aspirations in the 3 main segments in the U.S. So again, a gradual increase can be expected. But as we also mentioned in the call, we expect this to have beneficial impact also on sales and sales growth going forward, and we also expect that to come back with a gradual improvement in operating margins. When it comes to sales commission and fees, I'm glad that you noted that there is a reduction in the percentage to sales in Q1. And there is one main driver in this, and that is an activity that we've been running in the U.S. in the theme of balance sheet and process efficiency. And it's been a program to move customers from paying with credit cards to pay electronically over our bank systems. And this is an activity that has resulted in a lower cost for credit card fees and that is moving down sustainably, the fee is down with a percentage point. So that's the main driver by the reductions. There are some other reductions in the quarter, but they are more seasonality driven than anything else. But the main impact comes from reduced credit card charges.

And what did you say that impact as a percentage of sales?

It's 1% saving.

Okay. So this is a sustainable effect?

Yes.

Okay. And then to the third question that you had around De Novo. So the way that we look at this and interpret this is, first of all, the De Novo process compared to a 510(k) process. It sets a higher bar. It sets a higher standard. That is not only a negative. It's actually also a positive, meaning that it strengthens the moat. What we also see is the pattern that we see from the FDA is very, very similar to the De Novo process that we had for CERAMENT G. What I said on the call, and I think it's also important to highlight is that as part of the 510(k) process, the department of the FDA that was involved was the CDRH, so the Center for Devices and Radiological Health. They were involved. They are still involved and they are still leading the audit. As we move to a De Novo process and as this product is a combination product, so it's a device with drug-eluting properties, then the CDER, so the Center for Drug Evaluation and Research is also involved. They're brought into the process. The questions that we have received are more of the nature of being explanatory, clarifying rather than anything else. The 3 areas, which is also fully expected and planned for are in the areas of preclinical, clinical and biocompatibility. Now we're working on these questions diligently, and we want to answer them in a disciplined and robust way to make sure that we properly inform, educate, if you will, the FDA to understand what this technology does with CERAMENT V, what it already does with CERAMENT G, which is FDA approved. And also this is a product. CERAMENT V is a product that has been approved outside of the U.S. for many, many years. It is used every day in patients. So with that, I feel comfortable that it's more of not so much if we get approval, it's more of when we get it. And having said that, we control what we can control, how FDA reacts and responds that is outside of our control. But I feel comfortable that we're on the right path, and we will get it to market. It's more a question of when.

Could I ask -- sorry, but just it's not that they're requesting more data similar to what happened with CERAMENT G.

So far, it's more explaining and more details of the existing data that we have already provided.

The next question comes from Mattias Vadsten from SEB.

I have a few. So I think, as you pointed out, a solid quarter-over-quarter sales growth for CERAMENT G in the U.S. So if you could just tell me if there is something nonrecurring or extraordinary supportive in the quarter or if this is purely better penetration? And if so, what are the key contributors? You mentioned all of the areas, but anything to point out there? That's the first one.

Okay. So boring answer. No, it's no one-timers. It's no nonrecurring. It is more of the same that we've seen in the past. And the growth comes from all the 3 segments: foot and ankle, trauma and arthroplasty. And in absolute numbers, all 3 contribute positively. Of course, there's a lot of excitement internally and externally in our 2 newer segments, so trauma and arthroplasty, but all 3 segments contribute in a meaningful way in the quarter. When we look at existing and new accounts, it's very much the same trend that we saw in 2025 throughout the year and also at the end of the year, meaning that we get meaningful growth from both existing accounts increasing their adoption as well as we see meaningful growth coming from shifting from awareness to access with access on many different layers. So yes, unfortunately, there's no -- there's nothing more exciting than that, Mattias, to your first question.

That helps. My next one -- or can I just follow up in terms of working days, were they the same in Q1 vis-a-vis Q4? And what do you see here in the second quarter coming up?

So it's correct. So it's on the same level as Q4. So it's 61 days. And the number of work days is increasing in Q2, despite now starting with Easter holiday and with the risk of remembering wrong, but I believe it is 63 days in Q2.

I have a few more. In terms of CMS proposing changes that improve the payment for using CERAMENT G, as you mentioned also in the presentation here, can we say anything on magnitude? And can you refresh us just how important the CMS exposure is for both [indiscernible] and so on?

Yes. No. So first of all, it is a proposed ruling. So it is not -- it has not been approved. It's not been decided on yet. That's one piece. Number two, this full year '27 IPPS document, fully public, so all of you can go ahead and read it, knock yourself out. It's 1,600 pages of text of a very small portion of that, but still quite a bit of text related to CERAMENT. As it's complex, as it's many different codes impacted and several indications impacted. And when we look at it and when we also have advisers looking at it, it also -- there is a bit of interpretation in it. So we don't want to draw too many conclusions and too many specific conclusions yet. However, on a total level, on a high level, it is very, very positive. And pretty much everything that we requested in our submission pretty much went through. We have a couple of clarifications on how we should interpret it. But overall, it's very, very positive. And there are many layers in this proposed rule. And I think some of them you can sort of peel out or take out separately. One is the proposed NTAP for CERAMENT V. It's pretty standard. We would have been disappointed if we didn't get it. So that's one thing. The other thing is the extension of NTAP for CERAMENT G for open fractures. That is also sort of expected and you can strip out. What remains -- so if we strip those out, and those are very positive for us, what remains still is, in my mind, even more sort of strategically important for BONESUPPORT because it highlights a couple of things. Number one, it highlights that CMS continues on the path to pay more for outcomes rather than activities. Why that is important for BONESUPPORT is that, yes, we have a very expensive product. But the whole value proposition with CERAMENT is to avoid infections, avoid revision surgery, avoid readmissions. It is clear, not specifically only to CERAMENT, but in general, in this proposed rule that CMS is going in that direction. So that is very positive. And then you can see in diabetic foot infection, you can see it in also fracture-related infection and also periprosthetic joint infection. CMS proposes to incentivize technologies like CERAMENT and also, to a certain extent, almost use CERAMENT as a trigger point for a higher reimbursement because CERAMENT is very much linked to cases that have higher complication, higher comorbidities. So -- and I know you guys want a specific number, how much will sales go up? We cannot provide that. We don't know yet. It's complex material. We're analyzing it. But we're very, very pleased and satisfied with the proposed ruling and look forward both to the clarifications that we expect in the next couple of weeks and also the ruling to come into effect later this year with full effect next year.

But that's helpful. Lastly, I have a follow-up to Kristofer's question regarding CERAMENT V in the U.S. So if I catch this correctly, the 150-day review period will pause and it will resume when you submit your answers or call it, clarifications. So with this in mind, what kind of delay do you think we're looking at here in the process? Is it a couple of months or and also August, is that sort of a formal last date, not necessarily means that BONESUPPORT will resubmit in August, I guess.

So I'll answer it. Number one, Yes, you're correct in your first statement about the timing and the clock there. That's number one. Number two is knowing how and what -- how FDA and what CERAMENT -- what FDA will do is impossible for us to guess. So whether it's the delay or not, it depends on who you ask. Now what we want to do and want to make sure is that we answer the questions in a disciplined, robust way so that we get the approval in a way that we wanted to, not only as fast as possible, but in as a robust way as possible. So that's what we're doing. But again, you never know with the FDA. Now the end August time line that we communicate, that's the formal deadline. I mean, we will use that if we feel that it is necessary and we feel that it is good for the process. If we feel that we can submit it faster than end August without risking the quality of the material and the outcome of the process, we will, of course, do that. But end August is the latest formal deadline that we have.

But it's still reasonable to expect it to be cleared in 2026 with all of this in mind.

Well, it's always difficult to guess what FDA does. I feel comfortable that we're on a good path. It's not so much a question. If it could be in '26, that's my best guess. But if it needs to be extended to '27, it's worth waiting for, for sure, if we put it that way.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

Just sorry for going back to this CERAMENT V. I'm not sure if I got it right here, but could you please confirm that you do not need to carry out any additional clinical studies in order to be able to answer the questions from FDA. Is that correct?

That is our current hypothesis and current assumption. So yes, that's correct.

Perfect. My second question is regarding sort of the -- if you look at the sales split of CERAMENT G and CERAMENT V in Europe, is it possible for you to see in how many cases you use both products at the same time, i.e., where there's a super broad infection, whether doctors use it in combination?

So just so I understand the question, are you referring to OUS?

Yes. I mean in Europe, for example, where both products are approved and being used CERAMENT G and CERAMENT V, do you have a feeling for how many procedures doctors use both products at the same time?

We know anecdotally that it happens, but we have no somehow data-driven substance that we can lean towards, et cetera. But we know anecdotally that it happens. By that, it is not extensive somehow in terms of using both.

I get it. Excellent. And the sort of the split do you have a feeling for that in terms of procedural usage?

With some volatility, it's somewhere between 25%-75%, 20%-80%, where some of the largest use is on CERAMENT G. So roughly 25%-75%.

Okay. Perfect. My last question is regarding Germany. I'm not sure if I missed it in the report, but are there any comments on how Germany is developing for you?

So Germany is, in a way, somehow positive because it's stable. And what do I mean with that is that somehow it feels like somehow it's trending on the same level as previous quarter, meaning that we don't see a decline. And I think that's a first good sign that again, as we have commented, we're still focusing on Germany. We still have strong relations to German hospitals and German surgeons, et cetera. And I think that for Q1, we're glad that we see that the development is stabilizing.

The next question comes from Erik Cassel from Danske Bank.

I wanted to focus a bit on the trauma centers in the U.S., which you gave figures for in last quarter. I mean, penetration rate was obviously quite high. But is it possible to now that -- I mean, they've done pilots potentially up to a year ago to talk a bit about the current, say, conversion rates from pilots to continued use? And then also if you can say anything on how high, say, the continued use is as of now and how many of those are still in sort of an evaluation phase?

Okay. Thank you, Erik. I mean we don't provide -- we will not provide any numbers to answer your questions, but we can provide a bit more color on your question related to trauma in the U.S. So as I mentioned, we saw that all 3 segments contributed in a meaningful way for the quarter. That includes also trauma. So we see that the journey that we're on in trauma follows the plan and follows the expectations. I also said that there's a lot of excitement internally as well as externally around trauma and arthroplasty. That speaks to it. I think what creates internal and external excitement and helps us on this journey that you referred to are the 2 studies that we talked about earlier. I know that actually, you didn't really -- you quoted that those were not really meaningful studies. I would argue against that and say that they are very meaningful for us from a commercial perspective, and they get traction because it's a great way for us to talk about our product in a practical evidence-based way. So we're seeing in trauma, there's continued excitement. We continue to move from awareness to adoption -- sorry, from awareness to access to adoption. So now we're becoming more in the access and adoption phase with many, many more years to come in trauma, partly supported by the evidence that we provided. But we don't really give on a quarterly basis any data that you're asking for, Erik.

Okay. That's fair enough. And then I also wanted to sort of repeat a question from Kristofer and see if we can get a bit more detail on it. I mean, you said in the report that the commercialization costs are going to peak this year sort of. But is it possible to maybe quantify or frame it in a bit more detail the implied cost ramp we're going to see this year and how that also transitions into '27? Because it makes it sound like the incremental margins this year might be a bit worse than what we normally see. So I just want to make sure that we get the expectations right on this.

It's a fair question, Erik. And again, I think that has been a repeated theme from our side is that we will -- and I promise you, we will continue to do commercial investments if we believe that this will be beneficial for continued sales growth. And on that team, we have the EUROW Booster as we've communicated, I think it's more than a year ago. And that the EUROW Booster is adding SEK 10 million in incremental cost, and it will take at least 18 months until that program is returning somehow sales that covers the cost. In the U.S., we have been gradually strengthening the organization. And if we just look at current plans, that means that from during second half of last year and going into this year, we are adding 10 heads into our U.S. organization because we believe that this will be beneficial for the U.S. sales growth. That will create in the shorter term, a reduced positive trend in terms of operating margin. But as we said on the call, we are strong in our view and believe that this will come back to continued gradual improvements in the operating margins.

Absolutely. And on top of that, I mean, if we look at this case on a more of a couple of years basis, there's plenty of operational leverage in this business with what we're doing. We've taken quite substantial investments, both in EUROW as well as in the U.S. So if you take a more longer-term perspective, there's no change in the potential of the operational leverage of this business on the contrary, when we look at that internally and strategically in the more longer-term horizon.

Okay. And then I wanted to touch upon the U.S. BVF sales. That was, I guess, a soft point in this report. Previously, you've more talked about the BVF products perhaps becoming an add-on to CERAMENT G, so that you get new accounts doing CERAMENT G and then they also start to use the BVF product. Now it more looks like that there's cannibalization on the BVF product. Have you changed the -- what you're seeing for BVF and sort of the, say, longer-term implication of that? Or are you actually seeing any CERAMENT G accounts also picking up BVF?

So I think that in the longer term, we stay firm with that view because again, we continue to see that surgeons that has been -- that we're bringing on somehow thanks to CERAMENT G are also using the BVF product for surgeries that -- where there is none to very low infection risks. I think that what we've seen in the first quarter is, in a way, not negative for the longer term because what we've seen that somewhat explains some of the softer sales of the BVF in the U.S. is surgeons that has been traditional and solid BVF users have converted and increased its use of CERAMENT G. We believe that is positive, even though it may have a short-term impact on the BVF sales. But again, statistics shows that somehow with CERAMENT G as a growth engine, bringing in new surgeons, we also see that those surgeons are using BVF. So over time, we believe the BVF first will stabilize, but then we will see low-digit annual growth coming back.

Okay. But on the timing of that, it now looks like it's cannibalization. Do you think that will continue? Or is this sort of a stable rate do you think for that product?

I think it's too early to say because it was really visible this quarter in a stronger way than what we've seen, et cetera. So Erik, I'm sure let's come back to that question after Q2 and see somehow if that trend remains.

Okay. Just the last one, if I may. On the gross margin headwind from tariffs, I understand that as you're, of course, manufacturing the products with contract manufacturers. Is it possible to say in the medium term, transfer production locally to the U.S. to sort of offset this? Or is the relative cost in the U.S. basically too high, so it wouldn't be enough of an offset to actually do that?

From a purely practical point of view, that could be a consideration. But from a regulatory point of view, to move production is a very timely and costly process. So we will continue to -- as the business in the U.S. grows to look at various options when it comes to manufacturing. But here and now and to offset tariffs, somehow, it's not a helpful strategy.

The next question comes from Oscar Bergman from Redeye.

Thank you for very interesting report as always. I have a few questions left. I think maybe the first one, if you could just sort of clarify the constant exchange rate growth for CERAMENT G in the U.S., I think it would be helpful.

Yes. So explaining in terms of?

The constant currency exchange growth for U.S. CERAMENT G in Q1.

So again, as we showed in the graph, somehow, the sequential growth of CERAMENT G in the U.S. was USD 2.6 million. And that is somehow what's supporting the statement and the numbers reported and made. So sorry, maybe it's too early morning for me, but I think you have to clarify really what you're after, Oscar.

Yes, I was just thinking -- okay, maybe I have to check the report again, those numbers maybe was too early morning for me as well. I think we can just move on to the other question instead.

Yes.

I know CERAMENT BVF for spine is still very early stage, and you don't report this separately. But could you just give some sort of ballpark figure or anything that helped me sort of decipher the sales contribution so far?

Yes. So the spine BVF launch follows plan. And the plan, just to remind everyone, but this is very important. It is that we take a very, very focused approach on spine BVF. And we've said that from a revenue perspective, it will not have any material impact on the overall numbers on the total or even on the BVF side. So we're really -- it's really small numbers for spine BVF. And the reason for that is simply we're not in spine. We're not going after spine to sell BVF. Our hypothesis on spine is that it's a very attractive segment for us offering a product that does the 2 things that CERAMENT does perfectly, meaning healing bone and in a very controlled, predictable way, elute antibiotics. So from a sales point of view, spine BVF, I wouldn't put any material numbers in that, if that's what you're going after. However, what is very positive to see in Spine is that our hypothesis and assumptions about that segment in terms of the strength of the value proposition is being confirmed in the quarter. So -- but also just to manage expectations, to come with a product, an antibiotic eluting product into spine is a couple of years out. We need the clinical evidence. We need the regulatory approval. So that still remains the same. So no change really. But Q1 in spine with BVF confirmed at least what we see that we're on the right track and our assumption and hypothesis so far remain valid.

But can you share any numbers on maybe a number of customers that have tried out the product or...yes.

I mean, no, we don't provide any specifics on that. But these are -- we have wanted to keep it low. That's how we want it, and we're being very selective in which accounts we're going after. And to be fair, we could have gone for more accounts if we wanted to and actively promoted it more, but we want to keep it very strict, very disciplined, very controlled so that we do it in the right steps for the long-term case of CERAMENT in spine.

And I guess it's a fair assumption that you are targeting customers where you already have some experience with CERAMENT G for extremities? Or are you going for hospitals outside your sort of current customer base?

We're doing both, to be honest, because, I mean, again, it comes back to that you want the right surgeon, you want the right hospital that believes in our hypothesis of CERAMENT in spine, that believes and acknowledges the fact that infection is an issue and that also believes and buys into the characteristics of CERAMENT. Sometimes they come in already existing partnerships with our independent sales reps in extremities. Sometimes they come outside. So we're not fundamentalistic that they have to come from the existing distributors. But -- so we see a combination of both.

And I know you have a CMD in about a month's time. And I guess we'll hear more about the Spine segment there. But do you still expect it to be registered as a medical device and not having to go through a drug registration process?

Yes. I mean -- so our approach here is that we're a medical device company. We want to remain a medical device company, similar to what we have done with CERAMENT G and CERAMENT V. And that's also our plan and thinking on spine.

Okay. And just maybe a final question. The launch in India, I'm very happy to hear that you have first sales there already, but I suspect it's very small numbers still. Can you give some words on the progress here and maybe what we should expect for the full year?

Yes. No, absolutely. I mean, I sit here next to our CFO. He's super excited because it's not like we've only launched and we've only also sold it. We've actually done cash collections. So for once, Hakan is on good mood when it comes to India. So that's great, which is positive. But you're absolutely right. It's just the start. And in Q1, it's small numbers. And it's going to be small numbers as it always is when we enter a new country. With India, it's very exciting for a couple of reasons, meaning that if you look at the size of the total population, it's massive. We're not going after that. We're going after a niche segment of that population. So private pay and closely sort of managed with private hospital chains where we have a good collaboration and good trust. But even in our smallest estimates, the segment that we're entering, it's a sizable country in -- or it corresponds to a sizable country in Europe with margins that are similar to distributor margins in Europe. So that's why we are excited. But it's early days. It takes time, but so far, very pleased with what the team has done there and the progress that we've seen. But again, small numbers in Q1. And hopefully, we'll work to make those numbers grow fast in the couple of years.

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.

Okay. We have a couple of minutes left, and we still -- we also have a couple of questions on the chat. And then we'll just quickly read through. One question is -- and I'll leave this to Hakan. So I will read Hakan and then you'll prepare. So Hakan, could you please help us on the R&D spend for 2026? Should we expect a similar ratio versus sales as seen in Q1 and 2025?

So again, I think that what we've seen is a very stable run rate the last 4 quarters. And I think that's a good baseline to start from. The uncertainty that we have is some pending the discussions with the FDA and the regulatory pathway to get an antibiotic eluting product approved for spine. And we believe that, that will include and involve clinical studies and the absolute cost levels and the timing of these costs remains to be clarified, and that will add to the run rate.

Okay. Good. Another question we have is around dividends and capital allocation. And I'm going to read it and then Hakan, you will answer it. So why do you not consider a dividend appropriate at this time? What do you intend to do with the assets and the cash position of nearly SEK 500 million?

It's a good question. And again, some, it is good to have a solid underlying cash flow because that builds also confidence in the business for any future investments, et cetera. But also saying that, we understand and we see that we are generating more cash than the business needs in short to midterm. And there is also a good reason why the Board proposed to the AGM, the upcoming AGM in early May to get a mandate to buy back shares in the market as one way to allocate the funds that the business is generating.

Okay. And then we have another question related to CERAMENT V on the chat, and it goes like this. Do you expect that you will reply to FDA's questions regarding CERAMENT V before summer? So what we've said is that we -- the deadline that we have end August, we will reply to the FDA questions before end August. So we confirm that what we already said. And then I believe there's one last question on the chat, and it relates to the SOLARIO study. And it says, when will the full report of the SOLARIO study be fully published? Or won't it be? So we -- I mean, again, we don't manage the submission to the scientific journal. This is done by the lead authors. But we have good reasons to believe that the SOLARIO study will be published in the near term, exactly when and exactly which journal remains to be seen, but we have good reasons to believe that it will be published as per plan, and we also have we believe that it will confirm this paradigm shift that we see and hear about related to using systemic antibiotics versus local antibiotics. So we feel we have a good and positive outlook on the SOLARIO study. So hope to see something there in the short to medium term. I believe that is it. That concludes. That concludes. So with that, right on time. Thank you all for dialing in. And again, a warm welcome to the Capital Markets Day in Stockholm on May 26. Thank you very much.