Year-End report January – December 2024
Fourth quarter in brief
- Net sales amounted to 12.6 million SEK (30.1), which means a decrease in sales of 58 percent.
- Operating profit amounted to -7,5 million SEK (8.8), corresponding to an operating margin of -59 percent (29). Adjusted for acquisition costs of 1,8 million SEK, which are reported as an item affecting comparability, the operating profit amounts to -5,6 million SEK.
- Net profit for the period amounted to -5,3 million SEK (4.6).
- Earnings per share before dilution amounted to -0.14 SEK (0.10).
Full year January – December in brief
- Net sales for the full year 2024 amounted to 55.7 million SEK (89.2), which means a decrease in sales of 38 percent.
- Operating profit amounted to -18.3 million SEK (14.1), implying an operating margin of -33 percent (16). Adjusted for acquisition costs of 1,8 million SEK, which are reported as an item affecting comparability, the operating profit amounts to -16,5 million SEK.
- Profit for the period amounted to -16.1 million SEK (10).
- Earnings per share before dilution amounted to -0.39 SEK (0.23).
Significant events during the fourth quarter
During the fourth quarter, the purchase of Combinostics Oy was announced. It was also resolved that a rights issue would be carried out.
SyntheticMR has received FDA 510K approval for SyMRI 15 (3D).
December 4th 2024 Vedran Beglerbegovic was appointed acting CEO of SyntheticMR during Ulrik Harryssons sick leave.
SyMRI 15 (3D) has received regulatory approval in Australia.
Significant events during the full year 2024
In February 2024, the extraordinary general meeting decided to establish a long-term incentive program. For more information, see the company website.
SyntheticMR's version 15 (3D) of SyMRI have been CE- marked and have received FDA 510K approval.
SyMRI 15 (3D) received regulatory approval in the UK, Switzerland and Australia.
July 9th 2024, a press release was sent regarding estimated net sales for the second quarter.
During the fourth quarter, we announced our first acquisition, Combinostics Oy. The acquisition was completed on 2 January 2025 and was financed by a rights issue.
December 4th 2024 Vedran Beglerbegovic was appointed acting CEO of SyntheticMR during Ulrik Harryssons sick leave.
Significant events after the fourth quarter
SyntheticMR completes the acquisition of Combinostics Oy on the 2nd of January 2025.
The acquisition of Combinostics Oy was completed on January 2, 2025. The rights issue was fully subscribed and closed in January.
17th of January 2025, Ulrik Harrysson resigned as CEO and Vedran Beglerbegovic was appointed as the new CEO of SyntheticMR.
21st of January 2025 Vedran Beglerbegovic resigned as CEO of SyntheticMR and Johanna Norén was appointed acting CEO.
SyMRI 15 (3D) has been regulatory approved in Japan.
CEO comments
Focus ahead after a weak 2024
Sales in the fourth quarter amounted to 12.6 million SEK (30.1), which was below our expectations and the main reasons are in line with previous quarters.
The establishment of our new and stronger sales organization in the US has taken longer than expected and has had a negative effect on our turnover in the fourth quarter as well. We are pleased to see that sales have now started in the US subsidiary, although they are still at a too low level.
The 2024 Indian elections have temporarily affected healthcare budgets and hospitals' purchasing power. This has led to procurement being put on hold for most of 2024. We are now seeing signs that the market is recovering in early 2025.
We continue to have good cost control. Adjusted for the booked acquisition costs for Combinostics in the fourth quarter, we have a lower cost picture this year compared to the corresponding quarter in 2023. The lower costs in the quarter are mainly attributable to reduced personnel costs.
During the quarter, we had a positive change in our working capital of SEK 3.7 million (-13.7), which is largely due to a decrease in our accrued income. This means that cash flow from operating activities is in line with the previous year at -2.8 million SEK (-2.8), despite a lower operating profit of -7.4 million SEK (8.8).
Summary of 2024
The organizational change in our US subsidiary during the second quarter negatively affected sales for most of 2024. When the current US manager chose to leave our company, and our top salesperson also went to the same company, it had major consequences for sales in the coming months. When reviewing the remaining pipeline, it turned out that it lacked substance and was almost empty. During the late summer, a new US manager was recruited and the focus during the autumn has been on building a new funnel and relationships with new and existing customers.
It has also been a challenging year for the hospitals. The Indian election led to a pause in hospital orders and procurement. We have also seen that hospitals in Europe have been cautious with their budgets after inflation in 2023, which meant that most of them were running large deficits. This has affected new investments to a greater extent than the hospitals' operating costs. The political turbulence in Korea at the end of the year has also had some impact on our company.
In the spring of 2024, our 3D product received regulatory approval in Europe and in December we received regulatory approval in the US. Our release of 3D has been ongoing for a longer period. Despite our own regulatory approvals of the product, the robust release processes at OEMs have created delays. The launch of 3D is dependent on the OEMs registering the product and market establishment of our sequence on the camera. We are facing a technological shift that gives us positive opportunities, but in the short term has meant that some of our customers have chosen to pause their orders for 2D to wait for 3D. This has had a negative impact on the order intake for 2024.
During the fourth quarter, we announced our first acquisition, Combinostics Oy. The acquisition was completed on January 2, 2025 and was financed by a rights issue. This is a strategic acquisition that strengthens our product, and it will also strengthen our customer offering with a shortened time to market. The dialogue with Combinostics was initiated already in 2023. Given that our own valuation decreased sharply in 2024, the timing of an acquisition involving a share issue was not the best, but we could not control that. The deal as such meant that we managed to acquire a strategic asset at an attractive price. As previously communicated, the purchase price for the acquisition amounted to approximately 49.6 million SEK. We interpret the oversubscription in the issue as our owners understanding the logic of the acquisition and we are grateful for that trust.
At the end of 2024, the annual recurring revenue (ARR) amounted to 8.6 million SEK compared to 6.2 million SEK at the end of 2023. The net sales for Combinostics amounted to 9.1 million SEK for the full year 2024.
Short-term priorities
In 2025, one of our focus areas will of course be to regain sales capacity in our regions. Partly through our own operational capabilities, partly by ensuring that hospitals that want to invest in our products have budgets in 2025 and that external factors such as elections or disturbances do not disrupt our business operations.
The integration of Combinostics brings both short- and long-term expectations. SyntheticMR's new product portfolio that includes Combinostics gives a wider arsenal in customer meetings for our salespeople and offers a more attractive portfolio for our OEM partners. In the short term, we intend to address Alzheimer's disease and clinical applicability.
With regards to the acquisition that has been completed, we have also optimized the organization to achieve the best possible efficiency. Our acquisition means that our investment needs have been redistributed. The synergy effects of the acquisition lead to a reduction in the number of employees, primarily in the Swedish organization. In full, this means a cost saving of at least 10 million SEK on an annual basis. The implemented cost savings will start to give effect during the end of the second quarter and will have full effect from the end of the third quarter.
Long-term priorities
In the long term, we will ensure our product market fit with Combinostics and the feedback we have received from our customers where they want the combination of the two offerings. The focus has historically been on disease diagnostics, but we also see a rapidly growing demand driven by innovation from pharmaceutical companies that allows us to provide objective biomarkers for monitoring drug effects. Today, MRI capacity is a bottleneck for e.g. new Alzheimer's drugs where patients must be continuously examined for serious, but uncommon, side effects.
In the long term, the combination of our products is attractive for further development of biomarkers for, among other things, MS and dementia. This will consequently be a long-term priority to package and consolidate the product offering in these channels and have a clear strategy for how we cooperate with the manufacturers of MR cameras.
Although we have just experienced a difficult 2024, we have strong confidence in the value SyntheticMR can bring to healthcare and an ambition to become a world leader in this global niche market that requires years of cutting-edge technology development. We also believe that over time, it is possible to consolidate the market through acquisitions to create a stronger position and achieve economies of scale that are valuable to both customers and shareholders.
In conclusion
After a tough 2024, early sales in the first quarter of 2025 look promising.
Vedran Beglerbegovic is back in the company in the COO role.
We are aware of the importance of rebuilding shareholder trust. We are a strong and motivated team that, together with our board and partners, is ready for 2025.
Johanna Norén
Acting CEO SyntheticMR
This is a translation of the Swedish version of the report. When in doubt, the Swedish wording prevails.
This disclosure contains information that SyntheticMR AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 25-02-2025 08:43 CET.