Medacta Group S.A.

Good afternoon, this is the Chorus Call Conference Operator. Welcome and thank you for joining the Medacta First Half 2025 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Francesco Sicardi, CEO of Medacta. Please go ahead, sir.

Thank you very much, and good afternoon or good morning. Everybody, welcome to Medacta 2025 half-year results, conference call, and live webcast. The slides of today's presentation can be found on the Medacta Investor Relations website, along with the media releases. I would like to remind all participants that the presentation includes forward-looking statements which are subject to risk and uncertainties. And listeners and readers are therefore encouraged to refer to the disclaimer on slide two of today's presentation. And after those housekeeping remarks, I will now turn to slide four and start with the highlights of today's publication. We have already presented our top line H1 revenues, 344.1 million, corresponding to an increase in custom currency of 19.8%. Our adjusted EBDA margin for H1 in cost and currency reached 29.6%, which corresponds to a rise of 27.5% over last year period. The net profit for the period amounted to 60 million, a significant increase of 58% over H1 2024, And we confirm our outlook both for 2025 and our mid-term outlook. If we go on slide five, we can appreciate even more the considerable above-market revenue growth that Medact has been able to deliver over the last five years. This growth represents more than 4.5 times the market. So MEDAC is consistently delivering above-market revenue growth. on the next slide slide number six we can see why we are delivering those remarkable results and clearly the most important one is our ability to constantly innovate in a way that really impacts and improve patient outcome And at the same time, we are able to sustain the healthcare system in terms of providing solutions which are adoptable and sustainable. This innovation is sustained by education, medical education, fully personalized to our customers, the surgeons, so that they are able to adopt this innovation in a safe And the combination of great products with great service allows us to attract a lot of good and experienced salespeople. And this is the third pillar of our above-market growth story. And those are exactly the success factor behind our H1 results. If we move to slide number four, we can see again the split of our sales across our geographies, and I will not spend too much time as we presented those results already in July, but we can see a very, very good growth rate across all our geographies, Europe, US, Asia Pacific, and Latin America. If we then look at the split of our product mix, you can see again a very good performance across all our business lines. Our more mature and core product lines like HIPA grew around 11.5%, NISA almost 24%, extremities which include shoulder and sports medicine 44% and spine almost 19%. So we can see a very very good performance across all our business lines. Quickly an overview of how this performance compares with the market growth On the hip side, with a strong focus on anterior minimally invasive surgery, the growth corresponds to more, almost three times market growth. If we look at the knees on the next slide, number 10, we can see a growth focusing on kinematic alignment and the unique and first KA-optimized implant, the GMK Spherica, that allowed us to generate a growth which correspond to more than five times the market growth for the first semester. Spine, again, big focus on personalized technology, both through our Nexstar and MySpine, allowed us to grow five times faster than the market in a market that we know is very competitive and therefore a remarkable performance here as well. And then the extremities. Extremities, as I said before, they include shoulder arthroplasty and our sports medicine business line with a remarkable 44% year-over-year growth and, again, significantly above market growth. I would like now to introduce Corrado Forsetta, our CFO, to go over our P&L details. Please, Corrado.

Thank you, Francesco. Let's have now a look at our key financials. And I will start with this first slide where we see the gross profit that in the first semester this year reached the Euro 235 million compared to previous period of 190 million, representing an increase of 19%. The gross profit margin was 68.3%, pretty much in line with the previous year when it was 68.5%. Moving to the next one, here you see the adjusted ABDA margin represented by the red line. You see that this year, The adjusted EBDA margin at cost and currency reached 29.6% compared to 26.9% of the first semester 2024. And this represents an increase of 2.7% versus previous year. In Euro, the EBDA adjusted increased to Euro 98.8 million, representing an increase of more than 27% year over year. As we say, the acquisition of Parcus was a good achievement, also from an accounting perspective, and this is reflected into our unadjusted report at the BDA that was equal to 110.5 million, including a positive net one-off of 12 million coming from the badwill resulting from the acquisition of the Parcus compound. Moving to the next slide, here we see the net profit Before tax, the net profit was equal to 68.6 million compared to 44.7 of previous year. Thanks to this 12 million of positive from the acquisition, the effective tax rate was lower than the previous period. We registered 12.5% this semester compared to 15 roughly of the previous period in 2024. So, as a result, the net profit for the period was 60 million, or 17.4%, representing an increase of around 60% versus the previous period. Moving to the next one, here we see the CAPEX. As we said several times, in this business, growth means primarily new instruments and expansion of production capacity, And if you look at our cake, we see the usual big slice in that view represented by instruments, 36.2 million, representing by far the biggest chunk of our CAPEX. The second big chunk of CAPEX is represented by other tangible, where you can see there primarily the expansion of our buildings, production facilities, offices, and the logistics hub in Italy. And both instruments and are let's say driven, CapEx driven by growth representing more than 80% of our total capital. Research and development capitalized was equal to 5 million, more or less in line with the previous period. And today, this year, we have roughly 5.3 million, 5 million of CapEx in financial CAPEX, including the price paid for the acquisition of the company. Moving to the next one, we see the operating cash flow. So the cash flow generated by operating activities remains robust and sufficient to finance our investments. In particular, this semester, we registered 73 million compared to 42 of the previous period. explained basically by the expansion of our ABDA and some improvements in models and lower requirements of what we can expect. So this $73 million of cash flow generated was more than enough to finance all our capex that we just discussed and to generate a smaller positive free cash flow of $8 million in December. Moving to the last slide, you see here that thanks to the ability of the company to self-finance growth, the leverage remains very low. In the first semester of this year, it was 0.9 times the APDA. compared to roughly one time of full year 2024 and i would say pretty much in line with the average of the last five years where the value for the last five years the average is 0.95 times the adta i believe this is my last slide so now i'll hand it over to francesco for our final remarks