Creo Medical Group PLC (CREO) Earnings Call Transcript

Good morning, and welcome to the Creo Medical Group plc Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. And I'd now like to hand over to Craig Gulliford, CEO. Good morning, sir.

Good morning, everybody. Thanks for the intro. I'm here obviously with Rich, CFO, who's been with us since we listed the company back in 2016. And also to my right off camera is Kevin Crofton, who's the new Chairman who came in last year. And it's been a breath of fresh air for the business over the last 6 months, fresh pair of eyes. And yes, looking forward to going through the deck and what feels like a pretty exciting 12, 18 months going ahead on the back of a pretty eventful and very productive 12, 18 months that we just put behind us. First slide really just touches on the vision that Chris, myself and the team had right at the very beginning, which was to deliver advanced energy, the type of technology you see in laparoscopic surgery use all of the time and bring that to the field of endoscopy, where we can enable procedures to go from being treated -- patients being treated under general anesthetic in the operating theater and to be treated in the endoscopy route as we see an vision of endoscopy becoming less a diagnostic profession and much more therapeutic interventional surgical profession. Therefore, they need these kind of tools. And what we're seeing is validation of that process as we go through the difficult challenge of commercializing this kind of technology in the medical device market. But we've got a huge patent portfolio across these brands, that are just not the product brands that we have in front of us. And we're essentially at the point of monetizing or have been monetizing all of those and certainly will be at this kind of -- as we go through what feels like an inflection point over the course of the next 12 months. First time in the time that we've been running this business where I've come back from a conference in the U.S. able to sell all of these products into all of the physicians and the indications that we originally intended to do many moons ago. This technology, this kind of development of the market takes time, and we've now done that. We've built some solid foundations with an established global footprint of the initial product, which is the Speedboat product. We're now launching that in the EU and soon to be in the U.S. with the SpydrBlade product sit alongside that, which is opening up significant indications. MicroBlate Fine and MicroBlate Flex, which is our ablation products for the treatment of early-stage cancers in solid organs, such as the pancreas, the liver, kidney, which is our first cases with MicroBlate Fine. And you're all probably aware of the partnership with Intuitive, where we were -- they approached us and chose us for their pulmonary ablation program. And it was terrific last year to deliver the first robotically-guided ablation in the lung. And since then, during the course of the first few months of this year, we've sold our first product under that program, which is a terrific achievement for the whole company and for the team behind it. So we've got established footprint. We've streamlined the organization as a part of the nature of where we are, the completion of certain projects, but we needed to make some difficult and challenging decisions to make sure that we're really on top of our costs as we see the business developing. Micro-Tech in the transaction, which was a terrific transaction for us, was a catalyst for some of that, which allowed us to do it in a very cost-effective swift way, which will benefit for everybody, that was difficult decisions, but we executed on those. The benefit of that GBP 5 million in savings hasn't impacted on the '24 numbers, but will impact for the full year of '25 and ongoing. And there's some operational efficiencies that will continue to flow through as these products come off, manufacturing and how we manufacture them changes and evolves. And as we get to 2, 3 years from now and the product roadmap has fully evolved with the bipolar range of products, which is a more streamlined and efficient development program, 90% plus of our products will be outsourced from the business, and that allows us for a much more streamlined business model, having achieved what we've done with the business. Next slide, Paul. So we've got robust growth during the year with the Creo core technology, up to GBP 4 million in sales last year. Again, that was driven predominantly and exclusively through the Speedboat range of products, which we launched in 2019 with the initial generation of the product, struggled through the pandemic, like most businesses particularly as a development business at that stage. We launched the Slim version of the product in 2021, the UltraSlim towards the end of '23 and other versions of Speedboat. That fully complete that range. But we go into this year again with a full platform of technology that allows us to really leverage that. Let's talks through some of the tactics that we've had over the last 12 months where we've been focused more on utilization on existing customers rather than just blanket finding new customers. Now that we have the broader range of products just coming back from the DDW, the largest conference in this sector a few weeks ago, we see the power of having that full range of products enabling us to go after more customers as well as now increased utilization across the user base. The transaction with Micro-Tech, which we announced and completed the binding deal in October last year, is subject to clearances through the ODI foreign investment process that executed in February with a significant amount of cash, strengthening the balance sheet. But it's more than just the cash it provides. I mean it's a terrific deal because we bought the business for less than we sold for half of it, generates a dividend rate that is more than we would have enjoyed at the beginning of the acquisition with the profits that we generated. But more importantly, it opens up a strategic partnership with Micro-Tech, who are terrific partner with them being the largest GI business in China, the largest Chinese GI business outside of China snapping at the heels of some of the bigger global U.S. corporates in the GI space. And together, we anticipate that we'll be disrupting that significant space in the GI market. We raised additional funding towards the end of last year on the backdrop of challenging market, challenging macro environment, which we saw coming. We needed to make sure that we had the cash balance sheet just in case, and we executed on that transaction in February. So the technology platform is growing. The Kamaptive Licensing Program, we'll talk about in more detail with Ion, but we see that growing in robotics. We delivered a foundational kind of proof point with the system. So that's now complete back at the end of this year in November, and we published the results of that at one of the biggest robotics innovation conferences in Houston in February, thus driving a roadmap of potential opportunities with Kamaptive deals. But our outlook in terms of expectations with the -- with our business and with the expectations guided into the market excludes any of those kind of lumpy speculative kind of deals with Kamaptive. That doesn't diminish our ambition that we will secure them. It just means that we're building the business assuming that they're not going to happen. And if they do, we'll adapt the business to meet them, which is a significant change to how we probably positioned the business before, which has helped driving streamlining of the operational efficiency, again, which we've delivered. We also disposed at the end of this year, which was -- drove Rich slightly mad with the complexities of the accounting that go with the Aber business. We acquired that business because they are probably the leading manufacturer and designer of specific microwave components that we needed in our CROMA platform back in 2021. We delivered that. We've got the IP for the technology with that, and we delivered the next generation of that to make sure that we've got no obsolescence issues in the supply chain. We don't need that business anymore. So that's been sold back to the management and in a positive and constructive state. We've got access to our technology if we need it, but that's all built into the generator, which also now outsourced manufacturing of. So all the complexities with that has been dropped off our operational kind of complexities. Next one, Paul. So the industry we're in is driven by clinical evidence drives adoption of the technology. More adoption of the technology allows us to generate more clinical evidence with more indications that opens up access to more partners, more significant customers and key accounts for us. That then helps us to generate opportunities with our Kamaptive Licensing partners, whether they're within the industry or separate to the industry. And then the more of that we do, the more clinical studies we can generate and so on. So to give you a flavor of that, some of the studies that we've got underway on the left. In numeric terms, if I go back 18 months to 2 years, we had three sites running with three investigators looking into 2, possibly 3 indications in about 2 or 3 countries. We now have 38 investigators working on about 14 to 16 clinical studies. We have 4 registries running, and that's across 11 countries. So the scale at which we're generating clinical evidence is dramatically increasing, which will then send us back into generating usage and not just breadth of usage -- breadth of customers, but also the depth of utilization in each of those customers. And we're coming straight out of the gates with products like SpydrBlade that we started to launch in Q4 of last year in Europe, that's already now gaining traction with clinical studies on some cases, on a free and in some cases, on a paid-for basis. And that cycle will continue. MicroBlate Fine will be launching clinical studies and registries over the course of the next 3 quarters, which is a really exciting project to reenergize having delivered the MicroBlate Flex product with Intuitive. And again, we're generating data with MicroBlate Flex. We now circle back into moving to the next stage of commercialization with Intuitive so that we can start to generate post-market cases. And we've got a first sale of that MicroBlate Flex product at a terrific price point. So it feels like we are really at a strategic inflection point with our product range moving forward. Next Slide. So this technology that we have, Speedboat, SpydrBlade, MicroBlate's Fine and Flex, those brands we've been talking about for a long time. But genuinely, this is the first time I can sit here now and feel like we have customers engaging with every single one of those products, and markets that we're going at cover bowel resections with Speedboat, which was originally designed for. We've got great data from the NHS here in the U.K. We've got increasing data in the U.S., but there's no reimbursement there at the moment, but we do have reimbursement for that product and the procedure that it is involved in the esophagus and then for swallowing disorders as well as bariatric stomach cases. SpydrBlade Flex is the product that really inspires our users to think about other indications, not just some of the things that were originally designed for Speedboat. It was designed by a good friend of mine, Rob Hawes, who is the father of endoscopy. Many see him as that as the harmonic scalpel at the end of the endoscope, it's the utility for surgical applications, and we're seeing those expansion of indications coming to life as we've done first cases with SpydrBlade Flex in Europe, and we're excited to see that happening in the U.S. But in particular, there are two or three really key indications where we know it's going to succeed, and that will be developing into what we expect to be the exciting growth driver behind the bariatrics market where obesity, poor diet and all those kind of indications, fundamentally, it's a psychological disorder driving these cases, is going to drive a lot of growth for us. And I think I've covered Flex and Fine with the MicroBlate programs already, tapping into some significant markets. Next slide. So user growth, again, we touched -- we focus more on utilization by customer, users rather than just blanket increasing our user base. We did increase our user base as per our expectations at the start. The new products, Speedboat Notch, SpydrBlade, MicroBlate Fine, they will expand the utilization per user as well as additional users. There's numerous sites where we know that selling a system into a hospital with one product is challenging to get through the value analysis committees and so on. But when we have a range of products that sit within all of the interventional endoscopists within a hospital or a chain of hospitals, then it oils the wheels of getting value analysis committee sign-offs and so on. So that alongside the reimbursement for the upper GI POSE procedures, which is already driving a lot of demand and usage. And that's partly what drove the Notch -- stepping up a Notch product because they needed that extra feature for some of the upper GI cases. That's significant because it will increase utilization, but it also shows that we're able to add a line extension to our product range in a very efficient and low-cost manner. So I think we're in a great spot to continue to grow the business along the lines of what we have in the analyst notes that have gone out today. This graphic clearly shows where we are in terms of the product roadmap. We launched Speedboat Inject, the original Gen 1 product back in 2019 just before the pandemic. Revenues recovered in '22 after the pandemic. But in the last 3 -- 2 years, we've been working hard to complete all of the range, which is now -- has been launched or is launched as the graphic shows during 2025. That will drive revenue growth and utilization moving forward, which we're super excited about. In the gray is the devices that we're also going to be adding to the portfolio, which is a much more efficient product roadmap driven by partnerships such as Micro-Tech and others that allows us to attack some of the volume procedures where Advanced Energy really adds value as well, which will cost comparatively significantly less in a more efficient business model, and we expect to be launching those during the course of the next 12 to 18 months. That completes a range of devices that cover essentially all of the therapeutic applications of energy in the GI market and allows us to be a substantially significant player and dominate that world of energy in the endoscopy room in the way that Advanced Energy has really dominated laparoscopic surgery, which is, again, back to our original vision, and we feel very confident that we're on track to do that with the balance sheet to do so. Next slide. Again, just touching on some of the key opinion leaders that we're working with. This is an exclusive list. This gives you an example of some of the case studies where physicians are observing minimal post-procedural bleeding, post-procedural pain with Javed and his colleague, Mohammed Othman in Houston. [ Eduardo Arbinez ] he's been working with us very much on the upper GI, but as well as lower GI cases, careful dissection of complex areas and how it deals with fibrotic tissue and the complexities that come with patients with all sorts of indications where they've had previous procedures or they've just got very challenging lesions. In other cases, we're seeing reduced complications because of the Advanced Energy where stenosis or the stricture or the tightening of the esophagus that stops people from swallowing is dramatically reducing the number of visits that patients have to have the endoscopy room for what's called dilation where they put a balloon down your esophagus and force the fibers open so that they can swallow again. That doesn't happen with our technology. But we've got some additional coverage on that later in terms of the clinical advisory boards and how these people are impacting our life. Again, if I go back 3 years, the number of people that we were in a position to talk to, to do these things for us, you can measure on 1 or 2 hands. Now we have 38 investigators just looking at the clinical study program that we're running at the moment. And the results of that will really be felt over the course of the next 12 to 18 months. Next slide. So just touching on the Ion program, which is the MicroBlate Flex product with Intuitive. We signed the original development partnership with them in 2021. And there was 2 phases for that product where there was development milestones to fund that process. So on the right chart here, you see the revenues in '24 and '25 and earlier relates to the development milestones for delivery and execution of the delivery of that Phase II product for the MicroBlate Flex integrated into Ion. There was an expectation at the time that we would move to Phase III before we went to commercialization and started to do post-market cases beyond the clinical study. But when we saw the first cases with the Phase II original product in the end of 2023, moving into '24, there was a desire to switch straight to post-market cases and skip the need for Phase III immediately. That doesn't mean to say it won't happen. But what it means is we can launch into the market with the Phase II product. Post the end of the accounting period, we've sold the first product into those post-market cases at a great price point. And on that basis, if you look at the cases that the current users are using, they would annualize at around about GBP 150,000 per annum for that product just on the cases they're dealing with, and that's within the constraints of the clinical study and so on at the moment. So we're very happy with where we are. We see where the growth is going to take us, and that will be quality growth in revenue as opposed to great revenue, which is the development milestones, but the reason for that was to get to that quality revenue and product sales, which is what we've now started and we're excited to follow through on for the next 12 months as we develop those sites. The Kamaptive side of the business, we invested a lot of money in terms of where does the technology go next and how does that relate to the current platform that we have in the GI. We answered those questions last year. The team delivered a terrific outcome. Again, painful insofar as we then had to take the difficult decisions and execute on some of the savings that we needed to make, but perfectly well timed and facilitated by an event that we had at the end of the year where we truly demonstrated the technology in a robotic setting with potential customers. That was published and launched at a conference in February, which is the SAGES Innovation Conference. And what that's driven is a pipeline of opportunity where we know that the robotic surgical tools that will be in the future need to have the technology that we have or the capability we have to cut, resect with the jaws in the same way that surgeons enjoy with their harmonic scalpels and so on in the laparoscopic handheld world, they need that in the robotic world. So we've got a pipeline of those opportunities that ultimately may well end up with further development contracts and/or royalties at the end. What we are not doing is building any of that forecast or expectation into our forecast and nor have we built any of that in terms of the way we're resourcing and building the business. We're building the business on the core business. We have minimal costs associated with this, which is selling and developing those opportunities. As and when these things happen, we'll update the market on what we're doing and the guidance will change. But at this point in time, we are set with the core product and where we get to with the cash that we currently have and the forecast that we have in the -- through the analysts. So advisory network, just touching on it. Again, it's not just one group of advisers that we have helping with our business. We have an Advisory Board on the pulmonary side of the business, which is in partnership and with our own advisers with Intuitive. We have a GI Advisory Board in Europe, a GI Advisory Board in the U.S. And these are some of the best and most well-recognized physicians you'll see on the planet. They're not difficult to find. Please look at that. We also have an innovation council, which is partly these key opinion leader advisory specialists. But to be honest, some of these guys could do a great procedure if you gave them a blunt stick at the end of an endoscope because they're so skilled. What we need is an innovation council, which we're leveraging, which gets us into how do we help the new people, the jogging endoscopists, the newly qualified endoscopists as they embark on the journey of becoming therapeutic interventional professionals. And that's what we're helping to spearhead and that feeds into clinical studies and that feeds into the reimbursements that might or might not be coming into the market. We also then have education committees. We've got 8 people who sit on that, both for GI and upcoming on the pulmonary side as we're onboarding new sites the proctoring and mentoring of people through those early cases has proven a solid foundation for us in the past to make sure that we don't have, touchwood, adverse events that are reportable. We still haven't had any of those and hope long may the day be. And so we do have to report them. There will be one at some point, that just happens to any business. But to have got this far is a massive achievement. If I were to imagine how far we might get before we get an adverse event back in 2016 when we started, I wouldn't have thought we'd get this far because this is surgery. And I think that speaks a lot in volumes to the quality of the technology that we have. So the partnership with Micro-Tech. Micro-Tech are the largest GI business, distribution business, Chinese business in China, significant revenues. They've got revenues in excess of $300 million. Most of that comes through from the Chinese market, but they have a significant presence in Europe and in the U.S. It's in their interest and obviously, we have a shared goal to grow both businesses. It's a process that we started back in 2023. We looked at a number of incredible strategic partners, two in particular. We selected Micro-Tech in the middle of last year and executed on an incredible process really, if you think about the time it took to get to the agreed binding terms by October, but there was a sort of 3-, 4-, 5-month risk of ODI in terms of actually the cash being able to come into Europe to complete the transaction. Hence, we did the top-up raise in November, which I think was the right thing to do, certainly in hindsight as difficult as it was for everybody. But it gives us a strategic partnership. So not only does it give us the balance sheet strength, we are now actively talking to them and have launched co-development programs with them, which have materially changed the cost base upon which we expect to deliver a new product, which is the beginning of what will definitely come next. We are transitioning product into the Creo Medical Europe business from Micro-Tech, and that process is going terrifically well. What that means is our business, the joint venture will be essentially selling product that they'll be transferring in at factory transfer prices as opposed to distribution transfer prices. Hence, we'll see growth in the profitability on the current volumes. We also see volumes increasing because of the breadth of the product and ultimately, access through the sales channels that we have across Europe will increase. So what we do have is real clear line of sight in terms of the cash that's generated and the dividend rate that we expect from that business that will grow over the next few years. And that's all part and parcel of our pathway to cash flow breakeven over the next few years. And then also, we still have the other 49% of the business. At some point, we will be very confident of our channel, and we still are in Europe. But the asset that still sits there on the balance sheet is still significantly valued, and we can pull the trigger on that option as and when we choose to. And it's part and parcel of the conversation with Micro-Tech. We don't have to. We're very much protecting the Creo Medical brand and building that business as it stands at the moment and excited to start looking at how we can because we have the option to move some of the products that we sell through Creo Medical Europe and sell those through our Americas business, which is going really well. We've got a lot of growth coming through some of the Americas, but also talking to Micro-Tech as we are at the moment to look at leveraging our core products and how that gets introduced into China and the heavy lift that they can help share with us in terms of accessing a significant market with the products probably under the Kamaptive brand. Next slide. Over to you, Rich, on the financials.

Thanks, Craig. So total sales in the year were flat at GBP 30.7 million, but that doesn't really tell the picture. The picture now is that we have continuing operations and discontinued operations. Craig's already alluded to the fact that the audit was a bit challenging this year to get the numbers to where they need to be in the end, not because of any issues, just the fact we had to split the numbers into continuing and discontinuing. Going forward, we'll be obviously focusing on the continuing operations. The discontinued operations relate to the Creo Medical Europe, the 51% sale to Micro-Tech. The sales were relatively flat year-on-year from a pound's point of view, slightly up from a constant currency in euros. It's approximately a EUR 30 million, EUR 31 million business. That business will grow over the next few years around -- in and around sort of 5% to 10% a year. That's because of the relationship now with Micro-Tech plus driving of its own products. The continuing operations, that is our core products that Craig has already talked about. That's the Speedboat, the Speedboat UltraSlim, Speedboat Notch, the CROMA platform and all the additional products that come online. 2024 was very much Speedboat and CROMA. We grew from GBP 2.3 million to GBP 4 million. And the margin for 2024 overall was down because we didn't have the GBP 1.7 million of Kamaptive licensing from Intuitive to boost the sales up to the GBP 4 million that was shown in 2023. Actual gross margin, excluding that Kamaptive licensing was up from 40% to 45%, and we expect that margin increase to go beyond the 50% and into the 60s and beyond over the next couple of years as we sell the product at more volume and therefore, have the relevant benefit of volume-driven price increases and decreases from our cost base. The admin expenses, Craig talked about the savings we've already made. So the admin expenses for last year were at GBP 23.8 million. We've got GBP 5 million of savings to come through in 2025. That is a full year of savings in 2025. So the admin expenses will be running below GBP 20 million for 2025. That is key for us going into the future where we see increase in revenues, increase in margin, decreasing costs and therefore, that move towards EBITDA breakeven over the next couple of years. The remaining 49% stake will also bring in revenue via a noncontrolled interest and it also bring in cash flows via dividend. The 49% noncontrolled interest will be 49% of the profit of Creo Medical Europe. Creo Medical Europe over the last few years has run on an underlying basis of around about 20% EBITDA. We expect that 20% EBITDA to continue with a continuing increase in revenue for that business. So it should be a nice profitable income stream to us as the Creo Medical Group going forward. So the next couple of slides cover in the main what I've just talked about. We've seen core revenue grow from GBP 1 million to over GBP 2 million to over GBP 4 million. We expect to see the 50% or 40% to 60% growth going into 2025 and beyond, we expect that to happen over the next couple of years as we focused on adding more users, adding utilization per user and adding more products in. So that's where we see the growth drivers. That's where the focus. That's where the cost is now on the sales team. It's where the cost is on our engineering team and our development team. It's all on Speedboat and the derivatives of the products you've already seen. From a European point of view, this is the discontinued operations, very much flat year-over-year on a pound basis, slightly up on a core euro-to-euro basis. Clearly, the exchange rate has impacted us. But we do now have a GBP 36 million investment asset gain sat on the balance sheet. That was delivered in February with the close of the deal. You'll see that coming through in the first half results of 2025. But what it does mean is that from a profitable point of view, H1 will be profitable in 2025, but we'll have to include this as an exceptional gain on the P&L for the first half of the year. But it does give us that balance sheet strength going into the future if we decided to monetize that asset. Operating margins, just covered that in the main, the fact that our underlying operating costs will be going down by GBP 5 million in 2025. We have been adversely impacted, as previously announced by the change in the regulations around R&D tax credits. So we lost around about $800,000 in R&D tax credits we could have claimed in 2024 versus what we did claim in 2023. We have lost margins from the Kamaptive side in 2024 versus what we did achieve in 2023. But going forward, all of our cost base, all of our revenues and all of our projections are based on no more Kamaptive licensing revenue coming through. We have actually -- when we looked at our cost base, we not just looked at our cost base from a point of view of R&D and hedge. We've looked at our cost base across the range. So that includes relooking at what we've got from a Board point of view, from an adviser point of view, from use of auditors and a number of other areas. So we are looking to make sure that we are as lean as we possibly can, but at the same time, deliver the growth in revenue and the growth in the product base that we've already highlighted that we're going to be doing in the next couple of years. Cash, Craig's talked about the fundraise that happened in October. That was a sort of a belt and braces raise to make sure there was no issues with the deal with Micro-Tech that we were doing. We did expect the deal to close during Q1 of 2025. It did close in Q1 2025, but we couldn't be absolutely certain until we got the clearances from both China and from the European countries to ensure that, that deal was okay to go through. Going forward, we will receive cash from our Creo Medical Europe. It will be a 49% of the profits in the year, and there will be a dividend declared each year. That business will spin off somewhere between GBP 5 million and GBP 6 million in cash per year. Will we receive all of that cash every single year? It will all depend on how we want to grow that business and the working capital requirements of that business. But majority of our share will be coming through in cash is that what we expect.

Thanks, Rich. So this is an interesting slide in terms of how do we get from here to cash positive and a cash-generative business. We're a medical device business. It takes a lot of capital to get medical devices into the market. But if I look at this bridge, the items in green are things that are directly under our control or have already been delivered and executed. So the first graph is the cost savings that we've talked about, the GBP 5 million of savings. That's baked in and will happen this year. There's a further set of cost savings, which we've already identified that will just happen as we evolve the business and we become a more efficient business, having divested what we do with Creo Medical Europe as well as how we manufacture our products and where we manufacture those products. We've kind of downscaled the resources. We're back to some of -- the OGs we call them within the company of the talent within the business as we're kind of coming off some of these projects, but we're going to need that talent to drive some of these programs that we're working with Micro-Tech and other OEM manufacturers around the world and really leveraging the IP that we've got. But those savings are already baked in. Rich already talked about the cash that comes in through the Creo Medical joint venture with Micro-Tech. And then you've got the revenue growth, which is based on the outlook that we've got, again, which does not include any of the speculative connected deals. We anticipate that we will secure some of those, but the cost and the revenue are not built into the modeling for that. And as revenues grow, as we evolve the business and become a more efficient business model now that we can move into that really hard core commercialization phase, then we expect to see that margin increase accretive over time as volumes increase. So we can see a clear line of sight as to how we get from here to where we need to be. None of this includes obviously the access to the potential sale of the other 49% of Creo Medical Europe. So for me, sitting here now, we're confident that we can deliver and execute on these things with the balance sheet that we have and the access to, if we needed to, any non-dilutive funds that we may need to in the future. And that's part of the strategic deal with Micro-Tech and how that evolves. So we've got a really clear handle on where we need to be. But most importantly, we get halfway there almost just by the things that we know we've got direct control of and we've got line of sight of, in the green. So in terms of the outlook, handily highlighted in yellow for some reason, we can't get that out of the presentation, but it's an important point. We've executed on those changes. They were difficult for the staff. For any of the staff that hear this, we would thank everybody that participated in the process. It was difficult and challenging, and we appreciate that, and we appreciate the humility that everybody went through that, but it needed to happen, and we were ready for it to happen as part of this inflection point as we go forward. The momentum and the foundations that we built with Speedboat, which is essentially the first and only product that we've been developing the market with and developing those foundational clinical studies that we need to evolve the utilization is done. We've had a strong Q1, again, largely driven without too much of the new products coming in. What we do have is those new products that which are going to really kick in during the course of the second half of this year and beyond as we move into a more efficient product development and product roadmap as we move into some of the bipolar product ranges that help us, a, with our current and geographical footprint and will enable us to get into areas like China over the next 2 or 3 years, which will be super exciting with Micro-Tech. And we've been able to navigate to this point through some pretty uncertain global economic outlook. We did the fundraise in November, which was challenging for everybody, but it was necessary. We saw that the world was going to be and continue to be challenging, and it was. But we land up in a position where we've got some great products. We've got some great clinical indication and validation of what we're doing from the world's leading endoscopists and more of them -- and we're very confident about the next 2 or 3 years as we drive towards profitability. I think that's pretty much where we're at.

Thank you, Craig. And before we go into the Q&A, Kevin, I wonder whether you'll say a few words.

Yes, I'd like to. Since I'm off screen, I'm just going to use my voice at this point. First of all, I think I got to stress that it all comes down to focus and execution. And I give credit to the team at Creo. They've really put their head down their butt up and they've kept moving, and they've done a really great job at that. And you could tell from Craig's comments and from Richard's comments that the company is at another inflection point with a clear line of sight to EBITDA profitability as well as cash flow positivity. And that's really on the backs of having restructured the business, having resized the business for what it is, having taken out some of the speculative nature of the Kamaptive product program plans that might have been in place in years gone by. You already saw from, I think, Slide 8, where you've seen a whole raft of new products that have been launched in the last 12-plus months that are now in the marketplace and are real. And Craig already mentioned the growth that we have in users. We now got 18 -- 38 investigators, I don't know, 14 sites, 9 indications. I probably got the numbers wrong, but it's quite a bit different situation than where we were 12 to 18 months ago. And then circling back on the focus and execution side of things, I think it's important to highlight that the team has executed and has delivered 3 straight quarters of what we said we were going to do. And I expect that, that's going to continue. I'm not sure that we can look back in the history and say that we've done that 3 straight quarters in a row. And let's just keep that in mind. It's all about focus. It's all about execution, and I like where the position of the company is. I think we've got a really good program going. So those are my comments.

Thank you. Thank you very much, Kevin. We have some questions, some pre-submitted questions, but also some that have come through in the presentation. The first question, I guess, relates a little to sales forecast in the past. And one of the investors has asked about the fact that some of the previous forecasts had been not a bit wide of the mark. What was the reason -- underlying reason for this? And are you more confident now in your current forecast and outlook?

So I think for me, it's probably 2 or 3 key drivers behind that. One, we touched on the Kamaptive speculative revenues that we have reason to expect would happen. With Ion, we are expecting and could well still expect the Phase III part of the program, which would have generated some lumpy development revenues potentially. We also had draft contracts for other development activities, which would have been quite lumpy and high margin, reasonable to expect. But we've taken all of those out, and we've taken -- having delivered the contract, the work that we needed to do, but we've taken those out of expectations now to make sure that we've got a much tighter handle on what we're expecting. And I would also say we're developing groundbreaking products. So if you look at each and every one of these products, we are the only company that has delivered bipolar energy in the form of SpydrBlade in robotic capabilities as well as at the end of an endoscope. These things take science and we're proving the boundaries of physics. It's very difficult to pinpoint exactly when you're going to be able to do that. So having got those done and got the clearances done, I don't need to make another one of those. I don't need to make another MicroBlate Flex. I don't need to, thank God, and make another MicroBlate Fine, the world's finest MicroBlate ablation device. Bipolar RF products become much more straightforward, and we've already got evidence of how they're going to be much faster and easier and much lower cost to execute with a streamlined product. Having said that, we missed some of our core revenue, partly because of that. But when you starting from 0, it's extremely difficult to pinpoint where on the map we're going to be. That's not an excuse. What I do see is constant foundations that are delivering reasons why we can see how the growth is going to layer on the activity that we've got and the results that we're delivering.

So Craig, If we can stay on expectations, one of the follow-up questions was about, if you say in your statements, you're in line with expectations or management expectations, it's difficult observation from one of the investors to know what those are. Is it possible for private investors to access what the market data is, what the forecasts are?

-- So I think we have -- what Rich touched on earlier on, we've kind of streamlined some of the way in which we expend cash on our advisory network within the markets, but we still have Edison covering. We have a number of other sources of coverage, whether even if they're not able to access Numis' coverage or some of the institutional houses. If you need more access to data, you'll contact Paul and the Walbrook team, and we'll be able to put you in touch with as much of that kind of forecast data as possible. I'd also point out that during the course of last year, because of the complexities of the transactions that were underway, we were somewhat hamstrung in terms of what we were able to communicate to different type of brokers in order to get guidance out there. We've cleaned all of that up now. So we're in a much better position to drive that guidance. So if in doubt, go through Paul and we'll try and furnish you with wherever we possibly can.

So yes, if you e-mail us at creo@walbrookpr.com, the access research will be available, for those who need forecasts, share what's in the market. The same investors ask questions about clinical trial database. There are a lot of trials that are due for report soon or should have by now. Whilst I know from experience trial data is subject to what's best described as experiment error. Is it possible to have a rough estimate of when they're due?

So I think Kevin in an eloquent way, touched on some of the volume of studies that we've got. If I go back 2 years, we had 3 studies running with 3 investigators, 1 registry looking into 2 indications. We now have 14 studies, 38 investigators across 11 countries into 9 indications with 3 registries running, and that's largely been instigated or in the process of being put into place in the last 18 months. So that's a mixture of clinical studies and registries. The clinical studies, you can find in research online and see what they are. Some of them have already been published at DDW recently, so we can provide anybody with more information on that. The registries that we're establishing are filling up fast now that we've got more users. And that benefit of the registry is we're not bound by having to complete enrollment of the specific number of patients with a specific set of outcomes. The data is generated and we can mine and physicians who are participating in the this registry, can mine the data and publish in multiple ways. So we expect over the next 12 or 18 months, a significant increase in the volume and scale of clinical output over the course.

What do good results look like? And when you get the clinical output, what would show that these are good results?

So it varies depending on the product and the indication. Some of them are industry-led, so we're driving an outcome that we want to get because that helps us promote the products. Others are investigator-led where a particular investigator, for example, in the esophageal space has seen an outcome, and they want to demonstrate that to them. But most of them relate to better patient output. So it's safer and generating greater efficacy data. So if you look at the study that we're running on the pulmonary side, the first and most important endpoint is that it's safe and it's delivered in a safe way. We're delivering that into a world where patients are going to have a treatment and they're going to come back for follow-up. So the long-term efficacy data will take time because we're looking at how long -- what's the survival data of 12, 3 and 5 years. So therefore, it takes 12 months, 3 years or 5 years to get the data, but you first have to do the safety data. This isn't unique to us. This is the way the industry works. But spinning that flywheel that we had in one of the earlier slides is really key, and we can see that benefiting across all of the products.

Can we turn to Kamaptive? One of the investors asked, we've obviously had quite a lot of news about the partnership with Intuitive. But what's the situation for CMR? And also, are there any other partners that maybe could happen in the future or are on the horizon?

So we had a slide earlier on. We've got a long list of potential partners. We're not investing in the technology. We don't need to. We're investing in essentially one guy to help develop that market with some support from the rest of the business. He personally ran the Hugo robotic program for a company called Medtronic, which is a huge corporate. So there's companies like that. The CMR relationship, they've obviously just recently announced a funding execution. We know that they have energy and products that need to go into their platform, but we need to work with them on what that looks like. There are 125 start-up or emerging robotic surgical devices in the industry, and we're talking to a significant proportion of those. And some are right through to the point where we're scoping out exactly what the nature of the relationship would look like. Some are getting to a point where we need to put some technology into their hands to evaluate. So there's a significant number of those. And then there's a range of others. So we expect some deals to come through, but we're not baking that into our forecast or financial expectations.

Some questions for you, Rich. There's a couple of questions on cost saving and funding. I think you've addressed them in Slide 15 on that, but also on the EBITDA bridge slide, but I think it's useful if you just give us a short summary. So 2 questions. One was, can you give an estimate for cash overhead base for 2025 and whether you still think you funded to cash profitability? And then the other one was a question about the underlying cost base in 2024 was GBP 23.8 million. You have GBP 5 million of cost savings for 2025. Does that mean your cost base is circa GBP 20 million going forward, 2025? And if so, again, what's the funding situation in '26?

The easiest one to answer is the second one. So yes, GBP 23.8 million was our underlying base for 2024, GBP 5 million saving off that underlying base takes you below GBP 20 million into 2025. We expect further attrition on that base into 2025 and 2026 as we continue to evolve the development of products, the manufacturing of products and just the general need for cost base within the business into the future. So there's some more natural attrition of that number. In terms of the cash requirements, right now, we have a strong balance sheet. We have enough funding to take us through. For all the revenue growth that we have, the product development that we have and the general operating cost that we have. That is our aim going into 2026 and into 2027. We need to be successful on our growth and our revenue is the key. If we grow the revenue in line where we expect and we grow the margin in line with where we expect and we can control our costs where we expect, then we are sufficiently funded as a business.

A question on revenue growth, if I can. Core revenue growth, obviously, you put between 40% to 60%. So the question is, that's lower than the growth you've delivered in this period. Why is that? And it's a question about forecasting. Why have you given a range of 40% to 60%.

The range is so that we end up in an area where we expect to be for 2025 without being precise that we will be at dead on 40% or dead on 60%. In terms of the growth, yes, it's not as high a growth as in 2024 from 2.3% to 4%, but it's still a 40% to 60% growth. We're ensuring that we are driving utilization per account next year. We're driving the new products into each account. We won't see the full benefit in 2025 of the MicroBlate Flex product, the MicroBlate Fine product and the SpydrBlade product. They'll be going into early market release or limited market release in 2025. We expect to see the benefits of those coming through in 2026 and beyond. So yes, we do not expect to see double 100% growth in 2025, but you would expect to see at least the same level of growth in 2026 and beyond.

There's a question regarding post-sale cash level. So that was reported at GBP 31.2 million. You're now, as of the end of March, GBP 26.5 million. What was the utilization of that cash in that period?

So we made those GBP 5 million of cost savings towards the back end of 2024. Some of those payments for those cost savings were going through in the first couple of months of 2025. Some of the payments in there are for working capital purposes and in general, just business operating costs. We expect to see -- we don't just expect to see, we are seeing the costs from Q2 onwards coming off in 2025. So our cash burn has been reduced in Q2 2025, and we'll expect to see that cash burn remaining lower for the rest of 2025.

Obviously, in the presentation, you talked about what great return you had on your acquisition of Creo Europe. Are there any other parts of the business where it could be similarly monetized or strategic partners to accelerate growth. You obviously raised -- could sell the other 49%, but is there any other...

Yes. So the asset is 49%. That's a significant one. But we have an extensive IP portfolio. So we've done a really deep dive really heavily over the last 9 months, looking at the IP we need, the IP we don't need, the territories that we need. So that's generated measurable savings, but also we do have further savings to go at if we chose to, unless we're able to license or sell off some of the IP that is not core to either the Kamaptive program that we need or more importantly, the core products. So there's IP, but there aren't any other corporate entities that we can look at as an asset that we would be selling off or divesting. That was the main strategic goal of Creo Medical Europe.

Understood. We'll stay on Creo Medical Europe, there's a question regarding that figure of dividends that might be returned. You talked about GBP 5 million to GBP 6 million. Is that the amount that would be returned to you? Or should we be thinking 49%?

49% of that number. So underlying, it's a EUR 30 million business and growing, with a 20% EBITDA. So we own 49% of that 20% of EUR 30 million.

Maybe this might be answered you can answer 2 questions at the same time here. How would you characterize the state of the U.K. medical device market at the moment? Also, how does that compare with Europe and other export markets and the U.S.? And then at the same time, we've been asked a question about U.S. tariffs. So I'm sure that will come up with that answer.

You do the first one, I'll do the second.

Yes. So it came up in one of the meetings earlier today. It's interesting if you look at the U.K. market. So when -- it's our home market where we started first, we sell very much through pioneering physicians who chose the technology they wanted to deliver cases. They did the hard work of getting into clinical practice to prove the benefits. And then it's taken us time to get to the point where we now have the NHS Supply Chain data, which is back and been consolidated with NICE, and that's driving value-based procurement through NHS Supply Chain into NHS Trusts across the U.K. It doesn't make it easy, but it just sets a clear platform, and we're benefiting from that. Our most recent customer acquisition under that program, which is a large bulk deal, it was really acquired through the CFO, the financial administrative side of the NHS with physicians who wanted to do it, but we had to help them do their first cases to just get their local validation point that the data works, at which point it was bought for financial reasons and cost saving reasons. So we see that continuing. The recent changes in the NHS, I think, will be a disruption, but all of it points to efficiency savings, and it all points to the fundamentals of changing the points of care for patients in the U.K. In Europe, it's a slightly different situation and it's different in different markets. So Spain, we do well because it's a similar market where they can buy products and they have autonomy. In France, it's a slightly different market in terms of the tariffs and how they work, but we address that in different ways. We've had some success, particularly in the last few months with SpydrBlade product in particular. In Germany, you've got 2 very distinct markets, which is the doctor's office market and you've got the hospital market. Our products sit very well in the hospital markets, but what we sell within Creo Medical Europe is slightly different. So there's opportunities there where we work collaboratively with Micro-Tech, our JV because they have particular strength in some parts, and we have strength elsewhere. And in the U.S., it's very much a private medical market where it's funded through reimbursement through the EMEA. We didn't really touch on it too much in the presentation, but reimbursement has come into our world in the upper GI cases, and that's generating a lot of demand for product, which is partly a response to that we delivered the Notch product because it helps with those upper GI cases. So that's successful for us. And we expect reimbursement in the U.S. to come through for the lower GI over the course of the next 18 months. In terms of tariffs, I'll hand that over to you.