Medacta Group S.A.

Good afternoon. This is the Coruscall Conference Operator. Welcome and thank you for joining the Medacta First Half 2026 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Mr. Francesco Siccardi, CEO of Medacta. Please, go ahead, sir.

Thank you very much and good afternoon or good morning. Welcome to Medacta H1 2026 results conference call. So the slides of today's presentation can be found on the Medacta Investor Relations website along with the media release. I would like to remind all participants that the presentation includes forward-looking statements which are subject to risk and uncertainties. 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 number four and start with the highlights of today's publication. As already reported, Medacta grew almost 10% in cost and currency in H1, reaching €368 million in terms of revenues. We managed to report an adjusted ABDA margin of 27.8% in constant currency or 26.5% reported equivalent to adjusted ABDA of 97 million euro. The net profit for the period reached 42 million or 11.4% and we are confirming both our 2026 outlook and our mid-term outlook. If we turn to the same page, this is just to remind everybody how Medacta has been able to continue to deliver significantly above market growth. Our success relies on Differentiating innovation that are really improving patient outcome and at the same time they are sustainable under an health care system point of view. Those innovations are introduced in the market with a very strong focus on medical education. So training of surgeons all over the world that are able to acquire the knowledge necessary to use these new techniques, new technologies, new products through our medical education. And then of course we needed to constantly expand our sales force globally across all our business lines in order to reach as many customers as possible on a global scale. If we go to the slide number six, we have already reported our geomix sales. We have been able to grow double digit across three out of four regions. In Maya at 10%, in Africa at 13.1%, in Latin America 16.4%. while North America differently from the other periods grew around 7%. This changed a bit our geomix and as you will see this will have an impact on some of our margins. If we go to slide number seven, we can see a very solid growth across all the portfolio. Starting from our hip that grew around 8%, knees almost 11%, extremities almost 16%, and spine 4.5%. The product mix as well did change a little bit, and as we will hear later, this has an impact as well, mainly on the gross profits. If we go a little bit into the details, our performance in HIP continues to be significantly above market, probably around two times. We continue to focus on our minimally invasive solutions, and we have introduced in the first half of the year our enabling technology Nexstar HIP in the US and Australia, which is in limited market release. While we are in a full market release for our new Triple Taper Stem Infinity, which is starting to gain momentum in the U.S. and more recently in Japan. On slide number nine, we can follow our Thank you very much. for Kinematic Alignment at the GMK Spherica, which is clearly driving our growth and becoming our most important e-product in a relatively short period of time. Here as well, we are more than two times faster than the market in this segment. In spine, we did growth single digit, 4.5%. We have redesigned a bit our strategy, mainly in the US market, focusing much more on enabling technology, which is now representing around 50% of our spine revenues in the US, meaning 50% of our spine products are implanted with the support of Enabling Technology, and we are going more direct and more with exclusive agents in that segment. We continue to have a very strong performance in EMEA as well in Spain, followed by both Latin America and Asia Pacific, and this remains well above market growth in the first half of 2026. We now move to the extremity segments, almost 16% year-over-year growth for H1. We have introduced here as well additional technology elements. Together with our NexStar shoulder application, we have introduced the revision shoulder arthroplasty, first in the US and now is going to expand. outside of the U.S. And this technology is supported by a new AI-based My Shoulder Planner, which helps surgeons to carefully plan their products, their procedures, and hopefully deliver a better care for their patients. On the sportsman side, which is the other element together with shoulder arthroplasty, part of the extremity, In this segment of Medacta, we launched SecureFix, which is an all-inside meniscal repair system for knee sports medicine, which is very well appreciated by our customers and is a clear driver for our knee sports med portfolio. Here as well, we have a growth rate which is more than two times the market year over year. I would now like to ask our CFO, Corrado Farsetta, to go over line by line of our P&L and comments on the marginalities.

Thank you, Francesco, and good afternoon, everyone. Let me now walk you through our financial performance in the first semester, and let's start with the gross profit slide. In H1, the gross profit was 240 million, increasing from 233 of the previous year. On sales, the GP margin in the first semester was 65.2% compared to 68.3% of the previous year, representing a reduction of about 3%. This reduction is attributable to three main factors. The first one is an adverse effects impact of 1.3%. The second one is a price erosion of about 0.5%. Those two, let's say, coming from the market, totaling 1.8% of this 3% reduction are, as I said, taken from that. There is a third element which is strictly related to the top line performance in terms of geographic mix and product mix, as just discussed by Francesco, which is affecting our GDP of another 1.3%. And this is primarily attributable, as we have seen, to lower sales in the US market, to a higher top line coming from our new business, sports medicine, and also given a lower than expected top line also to a higher DNA ratio of coming primarily from our instruments that are in the market. This is important because those two, the two elements coming from the market are taken, the second one are strictly related to our, say, top line and performance. Moving to the ABDA margin slide, what you see here is, as always, there are two lines. The yellow line is representing the evolution of our ABDA margin in reported currency. And the red line is showing the ABDA margin at cost and currency. So you see that net from the 1.3% FX effect, there is a 0.9% reduction from the previous semester, which is primarily coming from the AGP erosion that we have just discussed, only partially offset by a limited operating leverage due to volumes and also the ability of the company to keep our costs under control. Moving to the net profit slide. The net profit in the first semester amounted to about 42 million compared to 60 million of the previous year. In order to comment comparable numbers, we should read last year net profit as 46 million, net from the one-off positive purchase gain coming from the acquisition of the company last year, so 46. Comparing to 49, which is coming from 42, reported plus about 7 million of negative effects effect. So the net adjusted and comparable is 49 versus 46. Moving to the slide of the operating cash flow. The number, the operating cash flow in the semester was about 56 million, down from 73 of the previous year, and this is representing, of course, the performance, just discussed, of our ABDA. but also a higher networking capital needs that were basically needed to replenish the implant safety inventory after the super strong performance of last year and the preparation of the necessary inventory level to enter the Indian market in the second half of the year. We will discuss very soon in the next slide the investing activities, 74 million, and this is resulted into a negative frequency law of 18.6 million. Moving to the slide 21, sorry, CAPEX 2017, yes. This is the usual pie of our CAPEX, as always, instruments for 2 million represented the biggest chunk of our investment, but it's important to notice that our tangibles now are 22 million, and this is a number reflecting the big amount of investments that we have to do in order to expand our production capacity, to produce our offices and facilities to accommodate and say the future production machines and employees that we have in our pipeline. The rest are more or less in line with the previous year research and development 8 million and other 2 million for a total of 74 million. Moving to the CAPEX for growth instruments plus other intangibles, This chart summarizes the evolution of CAPEX on sales over the last three semesters. Three lines. The yellow line is representing CAPEX for other tangibles that are primarily land, buildings, and production capacity. The light yellow line is representing instruments on sales, and the blue line on top is the total of the two. As you see, the percentage on sales of our instruments is pretty stable, around 10.5% to 11.9%. This fluctuation is basically driven by two main factors. The first one is the acceleration of top line. And the second one is also the planning and delivery phase in our business, which basically means to place orders ahead of time in the order of 9 to 12 months. So it is feasible to adjust, but it's not necessarily possible to do it in the first semester or in the same year. So this explains these situations. The other one is, as we said, representing the expansion of our land and buildings and the expansion of our production capacity. So 17.5% is without, just to be clear, without the R&D investments that we've seen in the previous slide. Moving to the last slide of my presentation. The leverage net debt on adjusted EBITDA was 1.2 times, very low, compared to 0.9 times of the full year last year. I think that that concludes my part of the presentation and I'll now hand over to Francesco who will take you through the outlook session and some final remarks. Thank you.