Medacta Group S.A.

Welcome, everybody, to the first Capital Markets Day. I think you all have a seat. I think we can start. And I will open asking Antonio Di Brino to give you some introduction and remarks.

Thank you. All right. Welcome, everybody, and good afternoon. Today we're going to talk about the H1 financial results, followed by our first Capital Market Day. Before we get started, though, I would like to – and we have a pretty busy agenda, as you can see. But before we get there, I'd like to draw your attention to our disclaimer, which can be found in our press release and in our off-year report that have been published earlier this morning on our website. In essence, during both presentations, we may provide forward-looking statements which are based on current expectations and assumptions and are subject to risks and uncertainties. Now for a special welcome, it's my pleasure to introduce our founder, chairman, and president, Alberto Sicotti. Thank you.

Again, welcome everybody. It is my difficult task to explain my role in the company, but I will try. This is a family company. then there is a family behind it, since three generation. When I was 75, I left the company because I was sure that my children, we are not children anymore, it was better not to disturb them because they were good enough to grow and manage the company together with managers I have hired with them in the past and we made them grow with us in what we call company culture, which is the development of a family culture. Then when I was 75, I left. But I'm still there as a president to participate into the guidelines to move ahead of the company. Which guidelines? Not which country open again. We sell in 67 countries, by the way. Then we have not such a problem. But important was to us, to me, to give the guidelines to integrate correctly the 100 new employees we hire every year. Because the integration of 150 now, new people in a company is like to buy a small company and integrate it. This was one of the main concerns. The other ones are the usual ones, which are the task of a president, financial overview. And as a father, the correct balance amongst my children, I call them again children, and the managers. Yes. Because we know that companies can be ruined if this balance is broken. Together with Francesco, Maria Luisa, and Alessandro, and all the others, all the managers we have hired together, we try to be able to go ahead in a correct way. 15% increase of sales every year is not a joke. Then I feel that the control of the company must remain in our hands because we believe in this company. We don't want to lose no power and no economical advantage in the years. And then I can guarantee you that my children are good enough. My children, my daughter, you know probably, you will talk about what you do. Fine, fine. schooling, management of the family office, etc. She takes away a big part of our concern. Alessandro is supply chain, purchasing, production, and distribution in 67 countries. And then, last but not least, Francesco, the CEO, I give you the The floor, they say. Thank you. Thank you very much. Thank you and welcome from my side as well. It is a pleasure to host you finally in our first Capital Markets Day. I think it was long due, but now it's the time, so let's proceed. I think we're going to start with... The H1 results, which have been just published this morning. The highlights are here. A very good performance in terms of revenues. We reported those already, so there's not any news, if you want, but still a very, very robust number we are very proud of. Well above the market, well above all our competitors. In terms of geographic segmentation, Europe is still growing faster than the other areas, around 16%. APEC and North America had a very healthy growth, 12% and 11% respectively. Product-wise, and this is something I will stress maybe later as well, more in details, we see really huge opportunities in NEIS where we are experiencing a very good growth, around 19% in H1 at cost and currency. Shoulder, almost 40% growth rate. Of course, starting from a smaller base compared to knees, but it is a product line where we expect to continue to grow, maybe not at this pace every year, but definitely continue to grow for many years to come. And then the hip and the spine, which are still delivering very high growth rate most of the time in line or higher than our competitors. When we talk about new products, we talk about how we introduce products in the market. The stress is always on the medical education and how we introduce products in the market through medical education is something very peculiar at Medacta and something that Medacta is respected for. and it's probably part of our success. This first semester, we have celebrated more than once around the world our 25th anniversary in Lugano, in Sydney, in U.S., in different locations. And so you will see as well some additional celebration in the second half, but we definitely had a concentration of marketing efforts in H1. Supply chain did a very good job. We did not face any issue in terms of supplying this very good growth. And this is thanks as well to our investments, both in networking capital in supply chain expansion, something that you have seen firsthand today here with us. Marginality was pretty much in line with last year at constant currency, despite, as I said, The fact that we have an H1 which was heavier than what we expect in a full year. And this is pretty much in line with our plans. We expanded our sales force and production by roughly 100 employees. Roughly 50-50. And this is just in H1. So most likely every year we are adding close to 200 employees or at least this has been the pace in the last three years. We did post a very significant jump in EAT at 38 million, an increase of almost 30%. We will go through the details. And once again, we were able to post an overall growth well above the market. Some key financial figures that recap those aspects. For me, what is interesting is especially the consistent trend we have been able to deliver in the last five years. And today, during the Capital Markets Day, we will highlight as well what has been delivered to Medacta since the IPO. But this gives you a little bit some visibility on some selected financial figures. In terms of growth, orthopedic is very well known for be very capital intensive. This is not Medacta, is orthopedics. And it is more specific to Medacta simply because we grow faster. When we grow faster, it means we can attract new customers. When there is a new customer, basically what we needed to give them is this. So CapEx, new instruments here. and networking capital sets of implants. That is physically just one kit for one knee. If a big customer is starting, it needs probably two, three, four of those. The value of this, we know, we share the ratio with you, and we will repeat it over and over. $1 of growth is roughly $1 of CapEx and half a dollar of net working capital. If you grow faster, you absorb more cash. The rest of the CAPEX is still related to growth, which is something you have seen as well today. New plants, buildings, new machines, which are fed in according to the supply chain request and of course the sales forecast. And then we have the R&D and the other tangibles. But basically if you look at the 54 million we invested in the first semester, probably 34 plus 11 are growth-related capex. If you slow down this, this becomes cash. I don't want to slow down. We commented already about the geographic area, so I will not go too much in details. If there are questions about it, I will be more than happy to answer, and the same applies to the product range where we see the different performance according to the different product lines. Maybe just a reminder, which is useful, hip and knee share the same sales force. So whenever you have a very successful product in your bag, you tend to lead with the most successful one. It has been the hip for 15 years and the knee was following. Now we see the other way around and that's a little bit of the scenario. Extremities is mainly shoulder, which is growing extremely well. And Spine, which is still at a healthy 10%, which is roughly probably two times the market or a little bit more. That's the revenues in terms of product line split for H1. Once again, just to share the trend by product line, in the last five years, you really see a very good constant growth rate across all the product lines throughout the year, despite the fact that, of course, especially 2020, 2021, we all know what happened. And so I would say we fully recovered, most likely better than most of our competitors immediately after COVID. This was my last introduction on the top line. And I would like to ask Corrado Farsetta, our CFO, to take the floor and continue with the presentation. Thank you very much. Thank you. Thank you, Francesco.