Medios AG

Hello, ladies and gentlemen, and welcome to the conference call of Meteos AT. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press zero followed by the hash key for operator assistance. May I now hand over to Claudia Nikolaos, Head of Investor and Public Relations and ESG Communications at Medios.

Good morning, everybody, and welcome to our conference call on our results for the first half of 2023. As always, all relevant documents can also be downloaded from our Investor Relations website. Additionally, this presentation can be followed in parallel via the internet link provided to you in the invitation. Today with me is our CEO, Matthias Gärtner, and our CFO, Falk Neusers. Matthias will start with an expected summary, followed by Falk, who will then provide details on the financials for the first half of 2023, as well as on the outlook for the current fiscal year, and finally Matthias will comment on New York's growth goals. Both gentlemen will be then available to answer your questions. I would now like to hand over to Matthias.

Okay, thank you, Claudia, and good morning from my side as well. Ladies and gentlemen, welcome to the conference call on the results for the first half of 2023. The first half of the year was again successful for majors against the background of the ongoing challenges. We managed to achieve fast and strong recovery in the first half of the year after week 4, quarter 22 due to regulatory changes since September 22. More important, we have laid the foundation for a strong third quarter. I can say today that the expected strong business development was already visible in July. So we expect a very strong third quarter driven by by the strategic build-up of inventories in the first month of this year. Accordingly, we are fully on track to achieve our targets and clearly confirm our guidance for 2023 with revenues up to 1.8 billion euros and an EBITDA-free up to 63 billion euros. We continue to implement our growth strategy as planned and are well positioned for a strong second half of 2023. Here, also the expected price increases in the pharma market will have a positive impact on our financials. Let's directly go to slide 3, providing an overview of the highlights for the first half of 2023. First, we further strengthened our patient-specific therapy segment. Through the sterile manufacturing collaboration with AFS as part of the acquisition of DPW, Vista Zentrum Baden-Württemberg, as of January 26. Following the strategic tail of Culture Vista in June, we have centralized all Vista activities in DPW's last-year structure. This is an important step to realize efficiency gains in Vista over the next year. Second, we posted good past year financials. especially when taking into account regulatory headwinds since September 2022. Revenue reached around 854 million euros and EBITDA fees amounted to 29 million euros with a group margin of 3.4%. This development is based on sustainable growth of both business segments and the acquisition of BBW included for six months. Third half-year results are impacted by the strategically driven inventory build-up. Consequently, operating cash flows were correspondingly negative. I will provide some more insights on the financials later. And third, the implementation of our Extended Growth Strategy 2025 is making very good progress, especially with regards to the internationalization of our business. We have identified several targets across Europe and are in ongoing talks with some attractive potential targets. As briefly stated in our last call, we now also offer highly specialized parenteral nutrition care for prematurely born babies and service-driven and impending supply bottlenecks. We benefit from the diversification of our customer group and strengthen our position as a reliable partner in the specialty pharma sector. Furthermore, we are already adapting our ESG reporting to the new European rules and regulations, for meteors still on a voluntary basis this year. In a nutshell, in the first quarter, we set the course for 2023, and in the second quarter, we continued this path as planned, despite some headwinds. We built up inventories in expectation of higher prices later in the year, continued to successfully integrate new co-farmer and BPW, and intensified work on our internationalization strategy. As said, we expect a very strong third quarter. On slide 4, we summarize the most recent sale of Hershey Blister, which was a strategic decision, and please be aware, this transaction had no material impact on our financials. Now let me share a short summary of the financials for H1 as illustrated on slides 5 to 7. Slide 5 shows the quarter-on-quarter development of our two KPIs, Revenue and EBITDA3. Due to recorded revenue growth and a slight decline in EBITDA3, compared to the prior year period due to regulatory price adjustments impacting our PST business since September 2022. Consequently, the EBITDA green margin for the second quarter of 3.3% was slightly below last year's level, but we expect margins to recover in the third quarter this year. Revenue in the first half increased by around 8% to a new record of 854 million euros, and EBITDA 3 also amounted to a new record level of 29 million euros, as shown on slide 6. Most of our growth was attributable to organic growth, but we will provide the details later. Slide 7 shows that we speak to our strategy of focusing more on the higher margins, patient-specific therapy segments to sustainably increase the margin of the entire matrix group over the next years. Year-on-year, the EBTA3 contributions of the PUP segments remain stable, 43%, and is above our target share of 40%, as shown on slide 7. Now let's move to slide 8, which you probably already know very well. Our network of specialized pharmacies has grown further and now includes 750 partner pharmacies. We are clearly the number one outsourcing partner for specialty pharma. This is an excellent basis for our further German expansion. Based on our increased capacity and the agreement of manufacturing for AFS that we mentioned before, we target to expand our compounding up to more than 400,000 individualized preparations in 2023, depending on indication area. On slide 9, please find an update on our ESG XCDC. We intend to voluntarily accept a non-financial consolidated statement to the new international standards and requirements already for the current financial year, in particular to the rules of the Corporate Sustainability Reporting Directive, abbreviated CSRT. A further review of METO's S&P and GAIA ratings was carried out in the first half of the year, leading to a rating improvement in both cases. We are also proud of the award of Best M&A Direction for the successful acquisition and integration of the Nucro Pharma Group. This was only possible thanks to the efficient organization and cooperation of all working groups on both parties. Teamwork at its best. In July, we were also honored with the Germany's Best Shop with the Future 23 award. This recognition is based on a analysis conducted by the Institute for Management and Economic Research, IMWF, and Deutschland Test. They award companies that are both sustainable and economically successful and offer their employees a pleasant working environment. We are also very proud to be part of a peer group, including very renowned companies like Roche, Bayer, or Sandoz, and even outperform some of them. This is all from my side for the moment. I now hand over to Falk to provide more details on the financials for the first half of 23 and on the guidance for 23.