FamiCord AG (V3V) Earnings Call Transcript & Summary

So, hi again to this small round, as usual in our earnings calls, and welcome to the full year 2025 earnings call of FamiCord. As usual, we prepared a small presentation for you, just a couple of slides to get into the topic, and then I'll hand over to Jakub, and he will lead you through the presentation. And afterwards, we have time for Q&A, of course. So, Jakub, please go ahead.

Welcome, everyone. Maybe some others will join because we got some e-mails from investors interested, but who knows whether they would be able to join today's call. So, we published our results as planned. The year was pretty good. So, we delivered more or less what we expected. Revenue grew solidly by over 7%, earnings even more by 12.3%. We had, as usual, a certain impact at net level, related to goodwill impairment. What is worth noticing is that we see -- we noticed a strong shift of our clients towards subscription services. So much more of them are selecting yearly payment over those who decided to prepay for 5, 10 or 20 or 18 years depending on the option. What we also announced in our guidelines that we noticed in the second half of the fourth quarter a sudden change in consumer behavior and then we became pretty cautious as that already continues in Q1 of 2026. One important information, we decided not to continue supporting our CAR-T project, understood that we cannot afford investing more. So we stay as a minority shareholder, but having less than 20% of the equity, and we are just a passive shareholder, and we are not consolidating the result of the company, which is called FamiCordTx or FamiCord Therapeutics, and that company is burning cash because it's a typical R&D company. We are living in pretty difficult environment that everybody knows, yes, which is rather getting more complex and complicated. There are less and less children, right. Economy is really fragile. So, that overall uncertainty may have a strong impact on our potential clients' behavior. And it's also related with AI because I believe that certain industries might be under pressure in terms of maintaining jobs of people, particularly, let's say, younger cohorts or simply employees of corporations, which are at age of, let's say, 30 to 35, and that is also part of our target group. So, we believe that impact of AI could be also responsible for the change of shift of interest in our services. From the cost perspective, we believe we are trying, at least, doing our best to maintain the cost in order, and we reduced, let's say, unnecessary spendings. And also, we decided to postpone unnecessary CapEx until having more clarity how the situation develops. That's it, I think, from the summary. Maybe, Thomas, you can add something from your end.

Can you go one slide back just to see if we said something about financial stability and full focus. Yes, we are taking care, of course, about the development that's also that we will see maybe this year. So, we are close monitoring our cash position. As you saw on the first page in the summary, equity ratio went down to 3.3%, which is pretty low, which is not a major situation for us, but needs to be understood that is mainly driven by impairment and also by extending our asset balance. So therefore, the equity ratio came down, but it is closely monitored. And yes, maybe from the financial side, it's also something we might add to be aware of.

Yes, I did not comment on particular markets, right, because it's not that all the markets are doing the same or we're doing the same. So, we see still continued growth in GCC despite the situation caused by a war between Israel, the U.S. and Iran, right. So, we see that our operations, they are doing pretty well and that they are doing also pretty well in Q1, right, and April. And certain selected countries in Eastern Europe are also pretty resistant to potential issues we see in other markets. So, it's not that everywhere we see a sudden drop of interest, but it's in majority of countries, but not in all of the countries. One more comment. Regarding this year, we decided to be really cautious as the situation is really unclear, economic environment is influenced by, let's say, political decisions and distortions and the outcome is completely unclear which direction it will go. We know that there will be no more children. There is no magic solution to be implemented in the short term. At least nobody invented that. Maybe Chinese will do something because they have even bigger troubles. So, maybe something new will come from Asia, who knows. And taking all of that into consideration, we decided to issue that kind of forecast or guidelines showing revenues in the range of EUR 80 million to EUR 90 million for 2026 and group EBITDA in the range of EUR 9 million to EUR 11 million. So, I think that's it from my side. If you have any questions, happy to answer.

Great, Jakub. Thank you. So, I'd say, as we have such a small round here, just please feel free to open your mic any time and ask a question. Tim, yes, as I saw. Happy to take you first.

So, I was a bit -- I mean, it's understandable, I think the outlook, right? But I was a bit disappointed or it comes at a timing where at least from the last reports you had to Q3 with placenta banking, positive sort of momentum in Eastern Europe, at least in some countries, yes, the overall impression is so much more muted, obviously, which then I'm pretty certain also led to those new impairments because the muted outlook obviously then results in another business outlook. So, my question there would be, is this what you already see? I mean you mentioned this that you are seeing parts of this in Q1, right? And that's led to this stance. But maybe you could just sort of outline where is it coming from? Is it more the overall contracts, pricing pressure in what regions? So, we just understand a bit more where your cautious, sort of, outlook is coming from? Or is it more precaution than actually what you're seeing? And Thomas, probably the follow-up for you, monitoring your equity ratio is an interesting formulation. I mean is this -- are you at levels where you have to take action? I mean your covenants for the banks, et cetera, that's all fine, right? Your EBITDA is good. So, this is more -- from my point of view, but please tell me if I'm wrong, it's more a cosmetic topic than an actual financial distress situation.

So, maybe I will start and then Thomas will answer. So first of all, we see something which is pretty unusual that consumer sentiment dropped in most of the countries. In the past, it was like some countries were performing very well, sometimes some of them not so well, some of them were in average, blah, blah, blah. So that was balancing, more balanced. At the moment, it's different. So, we see drop of sentiment or interest in majority of the geographies. And this is why we started to be really cautious because that is probably the first time in our history. It has never happened before. So, as I said, I mean, we are doing well in GCC. We are doing pretty well in Turkey. We are doing pretty well in Hungary. Romania, Poland is also not that bad. But some of these countries, although they are doing not that bad, they are doing below our expectations. So, that means that even the countries which we consider healthy are sometimes below what we would have expected. Whether there is one reason for that is unclear because we don't see what you ask maybe. We don't see that much pressure for price, but the fact that more people are choosing subscription is an indicator that consumption power is smaller or people don't like to spend money. So, we don't see that suddenly we should lower our prices by 20%, but by the selection of giving packages is also an indicator that price might be or might be an issue. We don't see competitors being suddenly hyperactive or offering special prices or being somehow desperate. No, we don't see that. So, I think it's overall market perspective rather than one action or one cause or one reason. We also mentioned that we -- in our letter - that we should also adjust our marketing strategies due to AI and the way AI is now used and how the information is searched. So, all the, let's say, digital communication was optimized for, say, traditional search engines. Now we are simply optimizing that to be better visible by engines supported by LLMs, by models because they are providing information in a different way and also, they are reading information in a different way. And that will take us a couple of quarters to adjust and adapt to be better visible or to have higher or bigger efficiency of marketing campaigns. So, that's more or less the situation from the market perspective. Obviously, there is one factor which we believe is rather positive after political changes in Hungary, a lot of money should flow from European Union to Hungary. So, we believe that that country would benefit. So indirectly also some of our potential clients will benefit out of that. But it's a very good market, but it's not that big market overall. Whether -- as I mentioned, I mean, we don't see very negative impact of the conflict in Middle East at our operations there. We are still growing. We are actually at record sales there. The question is on whether we can continue growth. That we don't know because that also depends on the political situation. We are not only operating in Emirates, we have also partners in Bahrain, Oman, Kuwait, so in the entire region. Yes. And otherwise, I think that Thomas may comment on the banking side.

Yes. Thank you, Tim, for the question. Why did I mention the equity ratio to say in the first step? It's not an issue of us, of course, because often, we have one financial covenant, which is net debt to EBITDA. So, it's not the equity ratio. But for somebody who is not within our business, it sounds strange to see an equity ratio just of 3.3%. But if you do understand our business as you do, it's mostly coming from our contract liabilities, so enhanced balance sheet plus the situation that we had some impairments last year, especially on FamiCord AG, so our German entity and our Portuguese subsidiary, Stemlab. And of course, we had some M&A activities last year. So, our debt position increased because it was financed with cash and debt last year. So overall, that's why our equity ratio came down. It's not worrying us, but we are taking care, of course, especially since last year, our operating cash flow changed since we have more subscription, which is good to have in the long run, it's a sustainable development. But nevertheless, we have less cash that we received. So, this is something we are really taking care and taking into account what Jakub said and what we are seeing in the outlook, you just need to be careful. That's why we highlight this. And this, let's say, our job to be careful on this, whatever would come in the market or in the macroeconomic development.

Okay. But just to clarify, the equity ratio itself is nothing which would require you to do any kind of capital measure or I just wanted to clarify that.

Tim, of course, it's better to have a higher ratio.

Sure.

That's clear. That's clear.

Great. Thanks, Tim. Any other questions today? This does not seem to be the case.

Okay. But if nobody has a question, of course, I have another question. Can you give an update on the placenta banking? I remember that Portugal was the next country you were looking. And I remember that you had some positive -- surprisingly positive signs from Germany also what this topic was. So...

Yes. I mean -- so Portugal, we introduced Placenta Banking in December. At the moment, what we see is a practical execution because hospitals in Portugal were not well prepared for that. Obviously, it's not our responsibility in terms of Portuguese regulations. It's different in Germany. So, we are gradually now training hospitals in Portugal to be familiar with the topic. So, sometimes we have cases that somebody signed the agreement and then hospital did not collect placenta, which is not complex, as you know, because we are just taking entire placenta. We are not doing anything with that. Cord blood collection is much more complex. But that was done and that we believe that we will improve in Portugal. We don't expect to reach that ratio of like 35%, 40%. We have seen some countries or even more than 50% of people taking that offer, but at least minimum, 20% is the goal. Germany, yes, we got the license after more than 2 years of discussions with the authorities. So, we have collection license and production license. And what we started is signing the agreements with hospitals across Germany. It is required. And that's a very regional process. So, there is no German or federal standard on the topic. We have to do it at the [ level of Länders ] in Germany. At the moment, as far as I remember, we had a range of 35 or 40 agreements signed, in that range out of more or less 600, which is the total number of hospitals. So, in that case, we believe that after we'll have at least 100 agreements signed, we will launch the product in the territory of Germany. We believe that will be in Q3 this year. It's more complex in Germany because due to regulations, not only we have to have it in the form of written amendment to our existing agreements with hospitals, but also, we have to formally train the hospital staff collecting placenta like we do regularly for cord blood and cord tissue. What is planned for this year is Hungary. We -- in the past, we were rejected to get the license because the authorities in Hungary told us there is no law in Hungary, which will allow to issue such a license. We believe that, that was a wrong interpretation of the law. And we reapplied to get the license. I think we placed a request again in end of February. And we expect rather positive answer. Obviously, the government is now changing. So, we will see also maybe some changes in the Ministry of Health and all the agencies. So, that will be probably a little bit longer process than usually. But we really believe that we may introduce also this product in Hungary this year.

Maybe a quick reminder. I think you once mentioned that your expectations or your -- what you're seeing currently is that it doesn't really cannibalize the navel blood.

Cord blood. Yes. I mean there are two things. I mean one thing that we simply have more money per client. Obviously, we cannot sell with the same margin, it's an add-on product. So, the margin percentage-wise is smaller, but it's simply a higher margin per client. But obviously, there is another factor which is important. Placenta seems to be well accepted by stakeholders. So, as I said, if you would ask person on the street, what is placenta? everybody -- almost everybody knows what is cord blood, not necessarily. So, from that perspective, we see that. And this is why the takeout is so high as for the new product. On average, it's over 35%. I think it's even more. I mean, even weighted should be over 40%. And another country, I forgot to mention, we also introduced that in the U.K. So, we will not process it in the U.K. We'll use our Portuguese laboratory for that because we have already the license in U.K. We don't have the license in placenta yet. So, we also introduced that in placenta banking in the U.K.

So, any further questions at this point? I think now that's not the case anymore.

Maybe one from my side.