FamiCord AG (V3V) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to the 9 months 2025 Earnings Call of FamiCord. As usual, this place takes -- this call takes place in a small group meeting here on Zoom. So thank you for joining our session today again. We prepared a short presentation for you as an update on the Q3 financials and the business highlights during the quarter. Following this, there will be a Q&A session. Please be reminded that as usual, this call will be recorded, and the recording will be made available publicly after this call. And now I'm handing you over to Jakub Baran, CEO of FamiCord, who will lead you through today's call. Jakub, please go ahead.

Good morning. Welcome to our quarterly call, and I believe our results were pretty good and we can shortly jump to details. I would not maybe read all the numbers but just focus on financial highlights. So first of all, our revenue grew visibly. Our EBITDA -- reported EBITDA improved unproportionally better. Net profit is positive again. What changed against last year and that continues for this entire year is more clients choosing subscription model over prepayment model. That means that from a cash flow perspective, we have worse result you might have expected but that's on the short-term perspective. In long-term perspective, these clients will obviously pay us more in annual payments. We did a few M&As. So that means our equity ratio improved in H1 but liquidity declined. We also started a few quarters ago showing invoiced amount, which is probably important for investors willing to better understand how IFRS rules are, let's say, may be applicable to CAC revenues. And what is probably strategically one of the key aspects is growth of annual recurring payments by almost 7% to 17.3%. So overall, 3 quarters were solid or very solid. And that is, I think, 10th quarter in a row, we are improving our results. So I'm pretty happy with performance of the company. Certain things changed, certain things are same. We are living in the world of a small number of newborns, and that will not change. It's all over Europe. It's the same in developed countries in Asia, and I believe that, that would continue at least for a while. I already mentioned increased share of recurring revenues. What we see in terms of geography is that Eastern European countries are doing pretty well or very well. Southern Europe depends, let's say, we have certain issues. And in Central Europe, we have a mix of countries developing well, and we continue suffering in Germany. As mentioned also before, we increased our stakes in Slovakian and Czech companies to 95%, and I believe that was the only spot we are not controlling in Central -- or Central Eastern Europe. And we believe these countries have potential of growth, particularly Czech Republic. Slovakia is due to the size of the country, which may be then not that promising. However, Slovakia many years ago used to be one of the most developed markets in terms of corporate banking, thanks to a very strong local player who is now not so much active. Two important things from business perspective. First of all, we see certain improvement -- visible improvement in CDMO activity. So in Q3, we signed 3 contracts worth more than EUR 1 million in total, and there are more prospects, which we believe will materialize in next year. Revenue from those contracts, obviously will come mostly with certain delays. It's natural for B2B business, we have to prepare certain things first before delivering products to the clients. Interestingly, one of these clients is a German company, which will start clinical trial in Germany. And I hope first application a patient will be this week, tomorrow, over the weekend. And if not, maybe that would come on Monday or Tuesday. But the samples are already in line to get Fraunhofer. We are cooperating with Fraunhofer. In terms of something which is very, very old historical issue, Cryo-Save, our former competitor, which bankrupted 6 years ago, we had several issues related to that, although we are not fully involved in problems of Cryo-Save. We simply took over the storage of 300,000 samples belonging to 300,000 families. And we settled court cases we had in Poland, and that is an important message because we would be able to open communication with these families proposing them to sign storage agreement with us. What would be the financial income? We don't know. However, we believe strategically that may have certain positive -- only positive impact at our revenues in coming years. We decided to maintain our guidelines in terms of revenue and EBITDA over -- after 3 quarters, you see that there is a high likelihood we will be in the -- rather in the top part of our guidelines in terms -- particularly in terms of EBITDA. But as we know from the past, fourth quarter usually brings more costs and is less -- a little bit less predictable than the previous quarters. So we stayed rather conservative. If only we would see that the results are even better than guidelines, obviously, we will notify the market. But at the moment, it's definitely premature. And I think that, that's -- that's everything in a nutshell. If you have any questions, obviously, we are happy to answer. Maybe Ingo, I mean, for participants, Thomas Pfaadt and Ingo knows him, team knows him. Martin, I don't know. Thomas is our CFO. So maybe we should...

Yes. We have a small group here, so it's a rather cozy happening. So I would like to ask you to unmute yourself and just your questions.

I'll take Jakub, Tim here. Just a few questions from my side. Can you remind us -- maybe this is for Thomas actually, what the impact of the consolidation of the new entities was in Q3 in terms of EBITDA roughly. So -- that would be interesting. And then in terms of M&A activities, do you see anything else sort of on the horizon? Any other yes, targets or minorities you might want to take over? And then lastly, what's the status on the CAR-T wind down? Where are you with that program? I mean you're obviously reporting continued operations. So it seems you still have discontinued operations. So maybe a quick update would be helpful.

So for Czech and Slovakia, I'm not fully aware of the detailed number but Jakub, you might help me for Q3, what we expect for Czech and Slovakia. So it's consolidated since June this year. So we have the first impact in Q3 for Czech and Slovakia.

I believe that for entire 2026, the impact will be in the range of EUR 400,000 to EUR 500,000 -- sorry, EUR 200,000 to EUR 250,000.

For 205 or 2026?

For 2025. Okay.

So -- but that's not a full year -- that's the sort of the half -- second half.

Half year, yes, because we...

Full year effect would be like EUR 500,000, EUR 500,000.

Yes. That range, yes. That depends, obviously, because we are now budgeting next year, and there are several question marks whether we should invest more and or rather stay conservative to understand better the market. So I don't know. I mean, normally, with normal approach, that should bring us in that range of EBITDA. If we decide to invest, obviously, there will be a delay, because first you invest, then you see the result. What is interesting in Czech Republic, in particular, are very high prices there because competition is very limited and it seems that the statistical client is a bit better, you mean better probably from mid upper class rather than mid-class, which is our statistical clients across Europe, including Germany. So in Czech Republic, that product is offered to, let's say, the really top part of the society. This is our understanding. Yes, in Slovakia, it's like for most of the other countries. So yes, we will see. But yes, that is the range, yes, anyway. M&As, there are some targets but not so many, honestly speaking. And for that, we would need capital increase because we cannot afford doing that from our credit lines. Remember that we have some payments remaining for the transactions in Slovakia and Czech Republic. This year, we have expected closing of nOvum transaction, signing was a couple of weeks ago, right? So I don't think we can afford doing more. I would say there are maybe 3, 4, not more left in Europe, which are considerable. Yes but that's another story. I would say that this is not a topic for the moment, not the top.

And maybe very important from an IR side to stress, there is no transaction in preparation. So this is a very important...

Yes. That we can say. That we can say. Obviously, we are in touch because that industry is super niche. We know each other very well with most of the owners or CEOs or Boards. But at the moment, we don't expect anything coming soon.

Maybe just -- maybe have a quick follow-up on that. What is the sort of the magnitude? Like do you have an idea of sort of EBITDA of these targets, the size or the overall transaction...

Very different. We have one company where, for example, the founder is already 80 years old. He handed over the company to the son and son is in renewable energy sector, and he's not interested, yes. And these clients are paying mostly annually. So it's a very interesting top because it's very easy to measure that there is no risk. The size is in the range of EUR 0.5 million, EUR 1 million for transaction. So it's -- you may name it even risk-free but that would mean we have to enter a new country. And I'm not sure we like to do that because that's an effort as well, right? So that's one transaction. Another is pretty big one is in the range of EUR 10 million. Yes. But again, we don't have money. So why consider at the moment, we stay in touch. Obviously, we see certain synergies but it does not mean we would agree price, and it's simply premature. So there are also targets -- and I mentioned 3, 4, yes. There are some targets I would like to buy but they are not on sale. And they are highly profitable.

Those are usually the best target.

I mean, obviously, everything goes on sale but the price would be unproportionally high. So -- and as several -- I mean we mentioned several times, the industry is continuing consolidation. However, there are not so many targets, which are really interesting. So we have probably reached the moment the market is saturated in terms of new transactions, yes, maybe as I said, 3, 4, not more, I don't expect. And for CAR-T, we expect in November or December, we will drop below 20% of shareholding. General assembly already happened of FamiCord Therapeutics. And at the moment, the company Board is collecting interest from minority shareholders and from some new investors, mostly individual people. Interestingly, these are people from pharmaceutical companies, usually managers willing to invest. Competitors, they are competing as companies, each other but these are private investments, right? So we expect that to be finalized in November and December. Then we will continue as -- you may name it financial investor a little bit with 20% stake and as potential subcontractor, yes, in case the company continue research projects and they will need products, we will be providing them from our, let's say, CDMO from -- by the way, our CDMO activity, we branded it Bramble Bio. So we are promoting Bramble Bio and so Bramble Bio will be supplier for FamiCord Therapeutics.

No further questions for the moment?

I would have one question. You mentioned that you settled the dispute with Cryo-Save. And could you give us some light on the current process where you are standing there in terms of invoicing or like that you basically invoice some of the samples from Switzerland? And what's the time line around this?

I mean we -- what I can say that we are communicating now with these families actively. We started in second week of October. So it's pretty new. And we started from families who or which already left the updated contact data at our website, right? So that is limited to roughly 20,000 families. To remind, we store samples belonging to 300,000 families. 50,000 of them already signed with us, it's 50,000. 20,000 is registered. And the rest is a mix of clients of different portfolios of clients, yes, because some of these families actually are our clients because originally, the companies we acquired over years used to cooperate with Cryo-Save in the past. So by protecting Cryo-Save inventory, we also protected part of our own inventory but still, we estimate that we should reach at least 100,000 more families, right? So that communication is under preparation. The difference is that we -- starting November, end of November, we are not respecting prepayments done by those families to Cryo-Save. Before, we were somehow obliged to respect money they paid to Cryo-Save, yes, for storage of the samples. It's not the case anymore, right? So we will simply see what's the interest, real commercial interest of these families to continue the storage. But overall, we can only be let's say, on the surplus here because until now, we had limited revenues, right? Because obviously, as mentioned, we signed 50,000 contracts. And these families, we sold some extra services like checking the samples, expansion of sales, they were simply very interested in understanding the quality and so on and so. But we are not publicly sharing information about expected revenues from that group of clients because it's simply a bit unpredictable. I would say that Q1, Q2, we will have more information. And then I believe that we can start sharing if we would only be able to say, yes, this is the number we can publicly confirm. But what I can also say from the other hand, it is not a subject of ad hoc. So that is a certain positive impact but not that big, yes. You would be able to say what is the financial impact on the current results and future results, definitely positive. And over time, that is definitely super positive because the prepayment periods will be over. And from our perspective, from 40% to 70% of these families will continue storage. And remember, Cryo-Save started in 2001 -- or 2000 and the highest number of clients they had in years 2009, 2012. So in 3, 4 years, there will be a bulk of families, which will have to decide whether to continue storage or not, and we believe 40% to 70% of them will continue under one condition. We have to reach them. And after so many years, it's not that easy because, obviously, people are moving, they are changing e-mail addresses, telephone numbers. And they were -- these contracts are not fully up to date.

Just one more question from my side, Jakub, for better understanding. So you currently have 50,000 clients already and you target to reach 100,000 clients or...

I mean, in total, I believe 100,000 clients is possible, yes.