Vitrolife AB (publ) (VITR) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Vitrolife report on operations for 2021. [Operator Instructions] I must advise that this conference is being recorded today on Wednesday, the 16th of February 2022. And now without any further ado, I'd like to hand the conference over to your first speaker today, Thomas Axelsson. Please go ahead, Thomas.

Thank you very much, and welcome, everyone, to Vitrolife report on operations 2021. The speakers of today will be the new CFO, Patrik Tolf; and myself, Thomas Axelsson, the CEO of the company. Please go to Page #2. And the headlines and what we would like to describe and go over together with you today is a situation where we are continue showing growth. And the most important thing, a new Vitrolife are being created, partly through an acquisition. And the highlights for the full year is that -- I will just do it quickly and then go into quarter 4 then, and we will do the presentation together of that one. From January to December, the full year, we had a sales increase by 39% in local currency. And the total sales of the year was SEK 1,681 million, and that was equal to 35% increase. The EBITDA adjusted for nonrecurring acquisition costs, and those were SEK 101 million, amounted to SEK 645 million, and there was a margin of 38%. The EBIT margin totally was a margin of 32%. And during the year, as you know, we did a major acquisition. And that was done during quarter 4. So let's go into quarter 4 then. Sales. Good, good sales and was equal to 35% increase in Swedish currency, and it was 34% in local currency. The sales total was SEK 514 million. The EBITDA, and we will go through this more in detail later on, but the adjusted for nonrecurring acquisition-related costs, and those were SEK 79 million; adjusted for those, the EBITDA was SEK 164 million and a margin of 32%. EBITDA reported then without adjusted was SEK 85 million and a margin of 16%. And all of that is a reflection of Vitrolife acquired 100% of the Igenomix business in quarter 4. After the end of the period, we did the acquisition and then from the 1st of January, we have a new management team and a new structure in place that we will find at the end of this presentation those 2. The Board proposes dividends of SEK 0.8, and that is a total amount of SEK 108 million then. And everything, of course, is in Swedish krona, so I will not continue to say that. Please go into Page #3 then, and we will start to look upon the sales and growth for the market region. I will repeat what I said before then that when we look into quarter 4 we have a situation where the genetic services and genetic services is Igenomix that are only included in the numbers for 1 month, for the month of December. So let's start on this one, and that's why we have -- looking on the growth rate and also the organic growth and try and then to give a picture upon the Vitrolife sales and then also what it is in real numbers. Start from the right side and Japan Pacific. That's always the most volatile market. Since we have a situation in Japan Pacific that they are using Time-lapse equipment for their cycles more than in any other regions. So if we have good orders there, then it is an excellent quarter. And if we don't have so many orders then, of course, in comparison, it can be a quarter where we have less or actually no organic growth. And that is the situation this quarter. We have a negative organic growth with minus 13%, and that is mainly due to large orders last year. Otherwise, the business looks good. And as you can see then, we got some shares and growth rate there from the Genetic Services. Then the next market, if we go into the geographical area is Asia, and it is mainly then China. Okay. Pandemic situation, what has happened, and as we are saying and what I do believe after context with the market is that the market is almost back to normal cycle numbers. But it is a big difference between the regions where some are overperforming and some are not just up to normal numbers. And that's the situation for China Asia then. So I'm quite pleased that the organic growth is 4%. There are situations where our sources is that China is not yet back. They were coming back more or less. And then due to some COVID outbreak during Q4 and some carefulness, clinics are not at Q4 doing 100% of normal cycles. And the same situation is for where we have territories -- like geographical markets in the territory that are highly dependent upon IVF tourists. The sales totaling for that area was SEK 95 million then. And the growth rate compared to last year in local currencies was 14%. Next region, EMEA. Total sales, SEK 218 million. It's a good situation. Organic growth, 5%. And the total growth rate was 30% then. The news regarding this quarter compared to earlier quarter is that our belief is that the public sector in those territories are more or less back to a normal situation. So what we can see is slightly most likely growth within those markets. The market that really is growing after the pandemic or during the session has been U.S. And U.S. are then, of course, included in our geographical area, Americas. We have had an organic growth of 15%, and it is totally sales in that territory right now, SEK 139 million. That's a growing area. It has also been one of our priorities, and the priorities strategically in moving or actually getting stronger in some areas is also a reason for the acquisition of the genetic services, Igenomix. The growth rate because we are then also adding on the genetic services in that region is 95% compared to last year in local currencies. What has changed also after the acquisition is that Genetic Services Igenomix has a good position in the total territory, from Chile up to Canada. And of course, the main business is in U.S. So it's good that we have a business right now that is covering both those geographical areas, North, South America. Please then go to next page and see how it looks like compared to the different divisions that we had last year. Consumables, good growth, plus 9%. What is -- what I'm very pleased with for the consumables is that the growth are in growth areas and within our priorities. It is within new products that we are introducing and also within the vitrification. And I want to say that it is a situation where standard consumables are having more than like a flat market. And then when you're introducing new products or those areas where consumers can grow, for instance, vitrification, are growing well. So consumable sales, SEK 235 million. Technology. What we see here is a negative growth of 12%. Sales was SEK 114 million. As mentioned before, it is a couple of territories that has good years. So comparison numbers with last year was tricky. I want to give an explanation for that because last year, in Q2 and partly Q3, all customers were concerned about the cash flow and the future. So they didn't put any final orders for installations of hardware in Q2. And we got orders in Q3 and beginning of Q4 for delivery. So that's one of the reasons that we had a peak Q4 last year. Otherwise, Technology looks very, very well and moving in line with our expectations. Genomics, growth with 33%. Genomics is our business where we are selling different kits to IVF clinics or clinics that are performing -- or laboratories that are performing right now pre-implantation analysis by themselves. So within Genomics, the situation has been and still are the major part that we are distributing products still from Illumina last year. We were able to do product development and we launched our own kit, and those are currently being slowly changed at laboratories. So in these numbers, 33% is still the distribution products. Very, very pleased with that growth. If we go into the next, genetic. And genetic services is currently Igenomix. So it is not including our own kits. Genetic services only for 1 month, it was SEK 114 million in sales. To give you some picture then because we looked earlier on the Page #3, sales and growth per market region, where are they strong? Yes, they are strong in Americas. Out of those SEK 114 million, 1/2 exactly, SEK 57 million, was in Americas. So quick, quick rough numbers only for 1 month, but I think it gives you a good indication on where the markets currently are within genetic services is Americas, 50%. The next one in size is the EMEA region, and they had sales there of SEK 45 million, and that's 36%. And then Japan and Asia was standing for 7% of the total sales equally. That reflects also, if we go back to the earlier division, I talked about Genomics, the kits that we were selling that had good growth, and when the America is picking up in every line and also EMEA and those 2 are the reflections on where is it that already a selection tool and a help for the couples, for the clinics are using pre-implantation analysis. That is mainly Americas, U.S. and after that, some countries in the EMEA regions and the other countries are starting to do it more and more due to changes in regulations and also changes in clinical outcome and how they can charge for it. By that, I would like to, as I said, introduce Patrik for his first quarterly report in Vitrolife. Please, Page #5 then, change to Page #5 and Patrik.

Thank you. So good morning, everyone. Patrik Tolf is my name. And I'll add a bit more flavor then into the numbers here as we have presented in the report. So if I start then with the sales growth, you have heard Thomas explain that one. And to repeat on that side, we continue then to grow with 34 -- 35% in the fourth quarter, whereof then 30% is acquired growth. The same number then applies for the full year, whereof then 9% of the full year was acquired growth. You see also then that the currency had a slight positive impact on the Q4 sales with 1%. And also then -- but on the full year, we see that it had a negative impact on with -- on sales with 4%. If we then move on to the gross margin. And you also know that we report the adjusted gross margin and the difference between the gross and the adjusted margin is then -- excluding then the amortized cost and for intangible assets. And also, if you look then on the full year, you see that the difference is 1% unit, and that relates then to previous acquisitions that was done in Vitrolife. The gap increases a bit now during the fourth quarter and that is related to that. We also then take 1 month of acquisition amortization-related costs then for the Igenomix acquisition. But the gross margin then in comparison with 2020 Q4 is a bit lower. So it's now 60%. A couple of things to address on that side is that, first of all, we have then a different product mix. As Thomas explained, we are continuing to grow them in several areas. And in particular, then we grow then in genomics during the fourth quarter, but also then a bit of a drop in technology. So that has an impact on the gross margin. But more to say is that the new division then, genetic services, has an impact on the gross margin with about 2% to 3% units on the lower side, given then the fact that they are a services business and a different structure in comparison with the other businesses in Vitrolife. On full year, that impact is approximately 1% unit on the product mix there. In addition to that, we have also seen a bit of cost increases then for freight costs. We have also taken some costs for scrapping, and that is then -- the scrapping is then related to that. We have actually increased the service level to our customers, which means that we have built up a bit of inventory. And then as a consequence of that, we've taken some cost of scrapping. If we move further on then you recognize then the adjusted EBITDA. And as Thomas mentioned here, then we basically then add on then the acquisition-related onetime costs here. That was SEK 79 million for the fourth quarter and SEK 101 million for the full year and goes down to an EBITDA margin of 32% versus then 38% for the full year. Also, we are then increasing a bit on the cost. And as you have seen that one in the fourth quarter, selling expenses have increased a bit. As a consequence of that, we have increased a bit of the customer activities. Also, we have taken a few R&D-related onetime cost here. That is then related for product certifications. And also, we have filled a bit of staffing gap, which has an impact on the operating cost side as well here. So adding back the onetime related cost here, that gives us an EBITDA margin of 16% and then in comparison with 32% here last year. Further on, we have, as you know, done a couple of transactions then in order to fund the acquisition of Igenomix. We have then issued new shares amongst others, which means that if you then look on the earnings per share, that goes down as one consequence then of the dilution of about 20%. Also then, if we look into the net debt to EBITDA, you see also that we have now a net debt position in comparison what we had before. So the net debt is about SEK 1.7 billion comparison with the net cash position of just below SEK 1 billion last year. But looking in then to the net debt, and in comparison, the adjusted EBITDA, that is 2.7x, which is in line with or lower than what our objectives are on that side as well. And as Thomas mentioned previously, the Board has then proposed the dividend with the same per share as it was last year with SEK 108 million. So with those words, over to you again, Thomas.

Thank you very much, Patrik. Okay. Let's go -- looking forward. We are right now into '22. And the situation then to get an integration work together with these 2, let's say, companies that currently are just Vitrolife, we have decided to do some organization and also changes towards how we will work and how we will define our business going forward. Consumables going forward, consumables will be included genomics. The situation there is that they are using similar production facilities. There are also a situation where we are supplying products to customers that are -- used to buy in that side and the support they are using. So it is built around from development, manufacturing, logistics and the support that we are doing to the customers within the IVF side. Technologies then, the business area, which I think is the easiest one to explain, is the same as it was last year. It is built upon a why we have done that as a separate one. It's the competence. It is more about electromechanics, more about computer science. It is about the electronic manufacturing and all of those support that is needed to develop new technologies and continue to support the current one. Genetic services is the business coming from Igenomix. It is all about the reproductive genetic testing services and, of course, also including the other kind of testing portfolio that currently are within genetic services. The biggest one is the preimplantation side, and there are the logic short-term most synergies between the businesses. And that is how we will report it going forward within these 2 business areas and also the going forward regarding how we will do it in explaining the growth and opportunities. And by growth and opportunities, go then to Page #7, the last one in this presentation for today. It looks very similar to what we said before. The long-term market growth is 5% to 10% in monetary terms. And as you can see, it is reflecting on the value-adding business that are higher than the normal cycle rate growth. And that's why we will continue to broaden the product and service offering. We have had service offering before in the long-term outlook. And the consequence is the service offering right now within the genetic services going forward, that will be a very important part for the long-term outlook. And expansion in sales in all different ways. Shortly explained that we can utilize the already decentralized organization within Igenomix, where they have subsidiaries in definitely more places than what the old medical device side has had, and also expansion in sales in the support that is needed to the different customer segment. By that, thank you very much, and I would like to hand over to the operator for question-and-answer session. Thank you very much.

[Operator Instructions] So your first question today comes from the line of Jakob Lembke.

If we start with genetic services and Igenomix, I believe it looks quite strong in the quarter. So maybe you can, first of all, comment on sort of the performance you've seen there, but also to what extent revenues have been impacted by or benefited from COVID-19 services. And if you expect those revenues going forward.

Okay. Thank you very much. I can do some quick explanations regarding it. Yes, if we look upon the sales full year last year, so you have a feeling for the complete year, the around 10% was COVID-related. And we are not including COVID-related revenues or profitability going forward. That's not our core business. If we are then -- so 10% on that side. And the core business then, if we are defining those outside COVID and also outside the area of -- or let's say, including the preimplantation then, around 80% of the business are then preimplantation then. Let's see, what was your question was regarding that side?

Yes. Maybe I can add on here. I mean, if you look at them for the full year, the growth, the sales growth for the full year was 27%. But if you then exclude the COVID-19-related business, so basically then the core business for Igenomix, the growth was 37%. And on a full year number up to [ EUR 110 million ].

Okay. But just to clarify, the revenues you report here today does not include any COVID-19-related sales?

Yes, it does. I mean, the numbers here are full numbers. For full year, looking back on Note 4 within the quarter report and also for the December then, and those are around 10%.

Okay. Yes, okay. And if we move on then. Perhaps if you look at the U.S. market, which I also think is doing quite well. And to me, just when I'm looking at the numbers, it seems like you should be growing quite a bit faster than sort of the IVF procedure volumes. So maybe you can just give some more color on what you're doing right in the U.S. and also if you are taking market shares.

I think we should be humble there. I do think that the business goes very, very well. It's difficult to say exactly if you are talking just about the U.S. market, what the growth rate are there currently. I think it is somewhere between 10%, 15%. So I think we're doing quite, quite well. If we are then including also the rest of Americas, as I said before, our genomics business, the genetic services are also strong in Southern America. But U.S., good, good growth, for sure. There are picking up on the Time-lapse side, the technology side. It is slowly taking more and more sales there. It is not yet impacting so much, but still impacting. Consumable side, yes, the overall then growth there is coming from the media, mainly.

Okay. And if we move on to the technology and Time-lapse. Would you say that you -- that 2021 as a whole was a sort of a strong year or more like a normal year? And then do you expect to grow from this level in 2022?

I think it was a good, good year. We were selling, I think, technology, full year for SEK 474 million or something like that. So I feel very confident. I'm not changing my views regarding the technology. What's good with technology is that we have been working with that for the morphology side and to support it. New customer segments -- not customer segments, but new reasons for looking into it, and that's partly from the U.S., is the workflow, that it helps them to reduce the labor or be more effective. So I'm still very positive regarding the technology.

Okay. And just the last question on the gross margin. Can you maybe quantify the impact of temporary costs in this quarter, looking at freight cost, for example? And also sort of for the next year or next quarter when we have full impact of Igenomix, how much lower will the gross margins be because of that?

Patrik, should you or I take it?

Well, you can start.

Okay. Yes, we have an impact this quarter and mentioned then this quarter on gross margin for Igenomix in the neighborhood of 2% to 3% on gross margin. Then we had an impact on some scrap, of course, but it's also an impact on some freight issues. So going forward, yes, the gross margin will go down. And even though we can't compare to 2020 Q4 because that was a situation where we were getting some -- we didn't have the right resources. So the thoughts right now and what we are working on is, of course, a lower gross margin and how that will impact the total will depend upon the product mix going forward from genetic services. Because the genetic services are also having, as you said, [COVID]. We are not calculating with any COVID testing. COVID testing has low margins. And if we can continue to work and keep up our ambition, our ambition with genetic services is to focus on growing areas with better profitability where the support from genetic services, especially in the genetic counseling and turnaround time, can give us an increase in gross margin from the current genetic service side.

Okay. But just to understand, in a quarter where you have full contribution from Igenomix, is it fair to assume that the gross margin is like 4% or 5% lower if you take that impact?

Yes, around that.

Something like that could be reasonable, yes.

Your next question today comes from the line of Ulrik Trattner.

I have a few. First off, following up on the additional sort of freight costs. Are there any specific products that are more burdensome than others in the quarter? That would be my first question, please.

Not -- yes, yes and no. We have not been able to use some of the, let's say, container shipments for consumables that we sometimes do because of the challenge with freight. So we have used air freight when it's been possible. The second thing is that all of our equipment more or less then has been in a situation where we need quick express flights on, for instance, the Media because that's more like a product that has a limited life time. And with the current situation where they've been delayed, we are not taking any risk. So it is within the consumables, mainly.

Okay. That is great. So on to Igenomix. 37% ex COVID is great growth. In your view, is Igenomix taking market share in the preimplementation testing segment? Or what are you seeing? A follow-up as well as Igenomix. If you can help us provide sort of the full year EBITDA margin on Igenomix as well as -- I know that ex COVID, at least from the presentation when you acquired Igenomix, their EBITDA ex COVID was 27%. And I'm guessing it is substantially lower, including COVID testing. So what is sort of a feasible margin going forward for Igenomix?. So first is on are they taking market share? Second one is on the margin side, if I could have some more color on that, please.

Yes. Let's divide it up in your 2 questions. The growth are, as you've seen, very good within the genetic services. Are we taking market shares? I do believe we are in some markets, and some markets are also growing from very small numbers. And that is a part of the increase. The genetic services overall has an underlying higher growth rate than, of course, what cycle number has. But I'm positive to the positioning. We have done an incredible good job in some of the markets, for sure. I want to be humble regarding the market shares currently because there is not any good official data that we can look into.

Okay. Fair enough.

And then...

Yes. If we then go back to the EBITDA question here, what we then can refer to [indiscernible] was obviously how -- what it looked like during the last year. And that number was about 25% on EBITDA margin. So that's the number for the full year 2021.

Okay. That's perfect. And so next question is more related to -- Thomas, you mentioned some stronger growth in some areas within consumables. And you highlighted vitrification. Just how fast is your vitrification sales growing at the moment? As well as are you seeing some increased volume of this antioxidant media that you have introduced recently? Just to get a better understanding on how fast you're growing in this area.

Yes. Yes. Antioxidants yes, we are growing where it is regulatory approved. You know that we have approved in the U.S., starting there. I said that Media was growing in U.S. That's one of the reflections on it. It's not yet approved in the biggest market, China. It's not approved within the European, if you say the MDD, MDR and those. So that's the growth area. Regarding vitrification, vitrification is growing more than under Media business. And vitrification is not only Media. It is also the equipment that you use for doing the vitrification then. And vitrification, if you combine that with a situation where it is more being frozen, frozen market vitrification are growing due to more and more is being frozen and also that when you do more genetic services, you are doing that with vitrified, of course, then because of the time frame that it takes to do the genetic analysis and also a situation where it's starting from a low level, but it is impacting what is sometimes referred as social freezing in territories like U.S. And it's coming also with good, good numbers in Europe. So there couple of factors why vitrification is growing: change in therapy, more genetics and new segments like social freezing coming up.

And should we assume vitrification sort of underlyingly growing more than double the underlying number of cycles? Or rough numbers here?

That's a good question, how you could view it, yes. Yes. There could be a rough number.

Okay. So just a good proxy. Two more questions, if I may. Once again, sort of related to Igenomix. And is there any way you could quantify how big their GPDX business is? Do you have any sort of understanding of what you're planning to do with this business? Because I would assume that this is outside of your core business.

Yes. It is outside the core business of fertility to some extent. It is outside what we have done before. And as I said, when we announced the signing, that it is an area where I didn't have any know-how and after being able to work together with Igenomix for a couple of months and also doing an educational session during the autumn together with the rest of the management and within the Igenomix, we are pushing right now to evaluate the business. It has been -- I think we said that also that it is more expenses put on this side than what it's been before. So it is a growth area. It is an area where we are currently investing a lot of money. And if it's going to succeed or not, that's a good, good question. But I'm right now not -- I don't have the mindset right now that we should not continue. Because there are situations right now where we have still similarities. I mean, we have -- for instance, we have customer needs. There are requests in GPDX services. There are -- another thing, we have the scalability. At Igenomix they have capabilities, they have sequencing capacity, they have logistics, they have customer support, the clinical know-how, strong client focus. They are local in many, many areas. We take away U.S. And this is a growth side. And you know that Vitrolife, we have a growth passion. So don't take it out of the picture. We are going to continue the investment, and that will impact, of course, the EBITDA going forward for a couple of quarters.

Yes, yes. I was rather sort of aiming at, I was not thinking that you were to discontinue this operation rather than perhaps spin it off, looking at what other sort of genetic operating labs, Agilent, Myriad, et cetera, et cetera. They're having quite handsome multiples out in the market. If there was any thinking on your side on spinning it off in a new entity.

Not right now. To spin it off then, we should feel then that we would not be able to harvest the possibilities within this market. But there's quite a few that has the capabilities that has this decentralized organization. So let's wait and see.

Okay. Fair enough. Great. The last question on my end would be on your thinking on the Cooper and Cook merger. If you regard the merger, if it's sort of finalized that they will be able to outcompete you on volume given that they will be a bit larger than Vitrolife going forward when combined.

I think this is not [indiscernible]. What we have been talking about, and we are right now having a quarterly report where Vitrolife has acquired a service business and Cooper are continuing doing acquisitions is that market are consolidating. I mentioned also in this report a short -- in the CEO report regarding the consolidation and changes within the market, too. When the market are changing, there are coming up new customer needs. And then the question is what is the dose want to have? Of course, it is products. Of course, it's going to be service, some of the services they will do themselves. So just a reflection on Cooper and Cook. This market will look like many other niche markets after some time, that it is going to be divided between a few players. And we are getting fewer and fewer. So this is a sign of normal change of an unconsolidated market being consolidated and then with different offerings. I don't think it's going to change so much regarding the competitive situation. We are already in a big competition with Cooper. And that's good because that is good for the customer.

And then I will just squeeze in one last follow-up question. What would be your next move then? What area do you believe will be the next mover within -- in IVF? Obviously, now Igenomix. But beyond Igenomix, once it's integrated and you feel comfortable in expanding or looking at acquisitions?

We will try to do what we have done before, and that is to define where are the value-added products or services that the customers are valuing? Looking into the growth perspective, just to buy something that is -- have a flat market growth could be done if it is at the right price. But I would like to continue to see and go into areas where our customers are also having a larger growth within those sectors. We mentioned at this meeting, vitrification, we are looking into the changes in workflow. We are looking into the genetic services. There are fields that is growing more as a consequence of our customers' growth potential. Those...

So why don't you merger with Cryotec?

There are many different markets or companies out there.

We do have one more question on the line at the moment. This comes from the line of Patrik Ling.

Maybe I can do some financial questions. First of all, coming back to your discussion about gross margin in the quarter. I actually didn't really get how much, if you can take it in million SEK, the negative impact in this quarter was from logistics and scrapping and so on. So maybe you can circle back to that one first.

Yes. So if we then take that on -- from a number perspective, there are a couple of millions, I would say, say, SEK 2 million, SEK 3 million impact for the fourth quarter on scrapping.

And then freight.

Yes. Slightly above that.

But does that include price cost as well? Or is that another SEK 2 million to SEK 3 million?

That's another SEK 2 million to SEK 3 million.

Yes. And you also talked about some product recertification. Did that end up in the gross profit as well or gross cost of goods?

Yes, it does. That has been a situation that is quite big, the MDR and all of those extra and where you put it into -- I don't know if we have shown those numbers, but I can tell you that those are around SEK 5 million, SEK 6 million, SEK 7 million extra.

Okay. So what you're saying really is that in this quarter, you might have between SEK 9 million and SEK 13 million in extra costs that shouldn't really come back given that the freight market stabilizes, really on top of the adjusted 60% gross margin that you had in -- if you just adjust for the acquired amortization?

Yes. And as you say, also that it is an impact of 2%, 3%, maybe on the genetic services.

So you take it then in percentage instead. So the freight cost is about 1.5% impact, and then the scrapping and one-off is also about 1.5% impact on the margin.

And then Genetic Services, 2% to 3%.

Yes, 2% to 3%. Yes.

Yes. Okay. Great. Then could I ask, I mean, we see that your amortization comes up and we have 1 month of Igenomix included in the numbers. How should we look on quarters going forward, assuming that currencies stay flat basically? What number should we pencil in for, say, Q1 on amortization and depreciation?

Yes. The amortization for Igenomix is about SEK 57 million per quarter.

Sorry, one more time.

The total amortization is about SEK 57 million per quarter. And then it's divided then into certain amount impacts then the gross margin and other impacts, then the financial net.

So given what you had before on 21, 23, we should take that more or less on top of that?

Yes.

Yes. Okay. Good. Then when it comes to the cost items, I mean, looking at your cost items in Q4 adjusting for the SEK 79 million in administration. I mean, R&D moves up quarter-over-quarter by approximately SEK 10 million. I suppose that is a mixture of things. But Igenomix should be one thing. Should we see another SEK 20 million from Igenomix in the first quarter, having it sort of on a full quarterly basis?

Yes, around that.

Okay. And the same -- can we use the same thinking when it comes to admin costs as well, that it's up quarter-over-quarter by some SEK 6 million? It should be added maybe SEK 12 million, SEK 15 million more in the Q1, having it on a quarterly basis? Is that too much?

Yes. It is a bit high on that side.

Okay. And then finally, on sales and distribution. It jumps up approximately SEK 40 million quarter-over-quarter. Is that only impacted? Or if you could perhaps quantify it a little bit. How much is more activity from the underlying operation and how much is actually adding Igenomix to the mix?

Yes. So if we then look upon it, I mean, it's now here, then the percent of the total sales was 17% during the Q4. And last year, it was 13% and 13% during the 2020. That was exceptionally low on that side. And we have increased, yes, with 17%. And your question is, okay, what should you put in -- going forward here as well? And obviously, we have 1 month of Igenomix into these numbers. And things are becoming a bit more normalized on traveling and so forth, so slightly higher maybe on that side.

Slightly higher than the absolute number? Slightly higher than the 17.5%?

Well, slightly higher than on the absolute number. That's for sure.

That's for sure. But definitely higher than the 13.4% that you had last year?

Yes, yes.

Thank you. It appears there are no further questions at this time. Back to you, Thomas and Patrik. .

Okay. If that was the case, then thank you very much for listening in. And sorry that it was a very long meeting, 50 minutes. But it's been a complex situation to understand, the new balance sheet and the P&L. So thank you for asking your questions, and bye-bye.

Thank you.

That does conclude our conference for today. Thank you all for participating.