Medios AG

Ladies and gentlemen, welcome to the earnings call of Medias AG for the financial year 2024. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listener remote. After the presentation, there will be the opportunity to ask questions. If any participant has difficulty hearing the conference, please press zero followed by the hash key for operator assistance. May I now hand you over to Claudia Nikolaos, Head of Investor and Public Relations, ESG Communications at Media.

Thank you. Welcome, everybody, to our earnings call for the 2024 financial year and the fourth quarter of 2024. As always, all relevant documents can be downloaded from our Investor Relations website. Additionally, this presentation can be followed in parallel via the internet link provided for you in the invitation. Today with me is our CEO Matthias Gärtner and our CFO Falk Neukirch. Matthias will start with an executive summary followed by Falk who will then provide details on the financials for the fiscal year 2024 and the guidance for 2025. Finally Matthias will comment on the status of the Milos growth strategy. After the presentation, we will begin the Q&A session. I would now like to hand over to Matthias.

Thank you, Claudia. Ladies and gentlemen, welcome to our conference call for the financial year of 24. We had a successful financial year 24 with a significant improvement in profitability and we laid the foundation for sustainable growth, especially with our transformative acquisition of Sefan in the first half of 24. So let's directly go to slide 3, starting with an overview of the highlights and achievements for 24. Revenue grew of 5.5% to 1.9 billion euros and EBITDA3 increased disproportionately by more than 30% to €79 million. All three operational segments contributed to this strong EBITDA3 increase. PS and PSD grew organically and PSD is back on its growth track with an EBITDA3 growth of more than 30% in the second half of 2024. after a disappointing first half of 24. For Q4-24 alone, we posted a strong organic EBITDA increase of 17.1%. Our new segment in the national business, reflecting the state-run acquisition, has been consolidated for seven months and contributed significantly to the good business performance. Consequently, we substantially improved our EBITDA free margin from 3.4% for financial year 23 to 4.2% for 24. We are aiming to further improve the margin for financial year 25. In 24, we have also shown that we can generate considerable cash from our operations. We recorded an exceptionally strong operational cash flow of almost 74 million Euro, part of which is due to reporting-based related effects. Paul will provide more insights on the financials later. We have also made progress in terms of governance. Our shareholders approved an expansion of the supervisory board from four to five members at our annual general meeting in August 24. Following this AGM, an ESG committee was implemented by the Supervisory Board, which is headed by its chairman. We have also made great progress in implementing our strategy. One of the most important milestones is for sure the internationalization of our business. With the acquisition of DATON, we created the European specialty pharma platform. With the state line integration just nine months underway, our current focus is on implementing the integration steps as earlier announced. We also start driving strategic initiatives, particularly in procurement and cross-selling, utilizing the strong and leading platforms of both major and state lines. We recognize that integration processes require a lot of time and effort. However, we are fully confident in the future success of combined companies. Briefly summarized on slide 4, you can see the status of our European platform, which gives us leading position in the specialty pharma compounding in Europe. This network is an excellent basis for our further international expansion. the realization of synergies and cross-selling opportunities. Furthermore, it will support the development of our activities in the field of advanced therapies, the future of individualized medicine. Now some further comments on the financials for Q4 and the full year of 2024. Slide 5 shows the quarter-on-quarter development of our two KPIs, Revenue and EBITDA-3. In Q4 of 24, EBDA pre and the respective margin grew significantly compared to the fourth quarter 23. We reached an EBDA pre-margin of 4.8 percent. earnings contribution of our segment International Business, in short ID, but also due to the strong organic growth in the PSD segment in the second half of 24. This positive development is also reflected on slide 6, illustrating the very strong EBITDA free growth of more than 62% for the fourth quarter of 24. Now the same illustration for the fiscal year 24 shown on slide 7. Whereas revenue increased by 5.5%, EBITDA3 grew strongly by more than 30% with a corresponding margin of 4.2% compared to 3.4% last year. This is fully in line with our strategy to focus on margin improvement. Let's go to slide 8, providing a short overview on the ESG progress we made in 24. We focused on compiling our non-financial report in line with the corporate sustainability reporting directive and EU regulation, widely known as CSRD. At the end, it was not a legal requirement in Germany, but nevertheless, we already used the European Sustainability Reporting Standard, so-called ESIS, of the CSRD as the framework for our non-financial report 24. For the first time, we reported as a group, including Saban, across several countries. We gathered respective ESG key performance indicators for the meters group, which will provide the basis for revision and further development of our ESG strategy to be conducted this year. With this strategy we will set new targets, including climate targets. We also completed our first and mandatory double materiality assessment. Overall, we laid the foundation for new group-wide and strategic management of ESG issues. Looking ahead, we are well prepared to fulfill new mandatory reporting regulations and to further develop our ESG strategy. More information on some key ESG figures for 24 and on our ESG ratings can be found in the appendix of this presentation. This is all from my side for the moment. I now hand over to Falk to provide more details on the financials for the fourth quarter, the financial year 24, and the guidance for 25.

Thank you, Matthias. Welcome to the New Year's Investor's Call offer from my side. I will give you a more detailed overview on the financials for the fiscal year 24, the full financial statement you can find, as always, on our website. Let's start with slide 10. All in all, we had a good year 24. With the acquisition of Seban, making an important contribution of seven months in the segment international business, profitability increased significantly. Revenues increased by 5.5% to almost 1.9 billion euros. also mainly driven by the operational segment international business but also the segment pharmaceutical supply. Growth profit increased to 154.6 million euro with a growth profit margin of 8.2% compared to 6.3% in the previous year. The increase in growth profit was mainly contributed by the IB segment but also to the organic growth of the PR segment. PST growth profit decreased due to the deconsolidation of Kirche-Sister in June 2023, regulatory headwinds and higher performance-based payment for additional compounding orders. The increase of personnel costs by €15.5 million to €52.1 million mainly results from the consolidation of Seabahn plus €16.1 million. Other operating expenses increased from €20 3.0 million euros to 39.5 million euros, an increase of 16.5 million euros. Of this increase, 13.5 million euros were caused by Sivan. The remaining amount was mainly due to higher legal and consulting costs attributable to the acquisition of Sivan and the ERP implementation. The EBITDA free of 79 million euros compared to 60.5 million euros in the previous year and the increase of the EBITDA free margin to 4.2% were mainly supported by the EBITDA contribution of the segment ID plus our continuous efforts to improve the margins also in the upper segments. EBITDA free was adjusted by extraordinary expenses in the amount of 60 million euros compared to 8.1 million euros last year. These consist of 1.7 million euros for stock options, 5.5 million euros for M&A-related costs mainly due to the SEBAN acquisition, 6.2 million euros performance-based payment for increased compounding volume, and 2.7 million euros for ERP system implementation. The appreciation and amortization rose by €10.2 million to €31.3 million. The increase is fully attributable to the C1 acquisition. The financial result of €-9.8 million is €-7.8 million below the previous level and mainly includes interest and similar costs for the financing of the C1 acquisition. Consequently, undiluted earnings per share for fiscal year 24 decreased from €0.79 to €0.51 because of higher personnel and operating expenses, including extraordinary expenses for LMA and ERP implementation, higher depreciation, and interest expenses due to the acquisition of Slivan. We generated a very strong operating cash flow of €73.7 million. This resulted mainly from a higher operating result and furthermore from a lower networking capital at the reporting date, mainly caused by higher trade tables. Consequently, we also show a strong free cash flow before M&A of 67.4 million euros. This positive development shows that MEDUS is able to generate strong operating cash flow. Nevertheless, I must dampen expectations regarding this cash flow development somewhat here and emphasise that this development is also due to one-offs at the reporting date lowering the networking capital. If you eliminate this one-off effect, we achieve our target operating as well as free cash flow. Investing cash flow of around minus 222.3 million euro reflects primarily the acquisition of C1, 6.3 million euro results from operational capex. Financing cash flow of 183.8 million euro reflect the drawings of 200 million euro bridge loan for the SEBAN acquisition in June 24. That was refinanced in December 24 with two long-term loan facilities, a term loan over 125 million euro fully drawn and the RTF in the amount of 100 million euro drawn amount at the reporting day 75 million Euro. The net cash inflow from financing was reduced by interest payments of 10 million Euro, lease payments of 4.3 million Euro and the planned repayment of the working capital line of C1 Crew after change of control in the amount of 1.1 million Euro. The cash and cash equivalents of 106.0 million Euro consist mainly of unrestricted bank deposits. The equity ratio decreased from 78.8% by end of 2023 to 54.6% because of the higher debt levels due to the SEWA acquisition and the replacement of the SEWA loan contracts as a result of the acquisition. On slides 11 and 12, we provide a breakdown of the organic and inorganic growth by segments for the financial year 2024. Inorganic growth reflects the contribution of Sriban for seven months, fully allocated to the operational segment IB. Revenue grew organically by 9.5 million euros or plus 0.5%. Inorganic revenue growth amounted to 88.8 million euro or plus 5.0% because of the C-Bahn acquisition. Slide 12 shows the organic and inorganic EBITDA-free breakdown by segment for the financial year 24. EBITDA-free increased inorganically by 16.3 million euro or 26.9% fully dedicated to the segment IB. and PST show organic growth. It should be noted that the PST segment closed the second half of the year with organic growth of more than 30% after a retail EBITDA-3 in the first half of the year. EBITDA-3 development in the segment services reflects the increased number of executive board members plus the STI component for M&A in 24, expenses for the integration of C-Bank Group and the moderate headcount increase for the further development of identified strategic business activities. Let's go to slide 13, providing an overview on segments. The 5.5% increase of group revenue is mainly driven by IV for seven months and to a lower extent by pharmaceutical supply segment. The external revenue of the PS segment rose by 1.4% to around 1.6 billion euro. external revenue generated by these C-segment degrees at 5.4% to €213.6 million at decline of €12.3 million. Around €6 million of this decline are attributable to the sale of Kölsch Ablister in June 2023. In addition, as already mentioned, regulatory price adjustments as well as higher performance-related payments for the acquisition of compounding volume had also a negative impact on revenue in the reporting period. The IB segment contributed 88.8 million euro external revenue in 24. EBITDA-free for the PF segment amounted to 15 million, 50 million euro, a plus of 3.3 million euro or plus 7.1%. We are pleased that the EBITDA-free for the PST segment increased by around 1.4 million euro to €23.3 million or a plus of 6.6%. As already said, the EBITDA peak growth in the second half of 2024 compared to the previous year amounts to approximately 30%. IB contributed with a very strong EBITDA peak of €16.3 million for the period June to December 2024 and a margin of 18.3%. Slide 14 provides the status information on the debt financing We financed the main part of the cash component of the C1 acquisition by a bridge facility of 200 million euros. As said before, we replaced the bridge facility by the following financing facilities with a total amount of 225 million euros consisting of two charges. A term loan facility of 125 million euros with a term of five years. Repayment will start on March 25th. and a revolving credit facility of €100 million also with a term of five years. The RTF has a term extension option of up to two years and a loan amount step-up option of a further €50 million to finance future growth. Based on estimated future cash flows, an amount of €30 to €40 million annually would be available for repayment of debt starting 8 March 2025. Let's go to slide 16, providing our guidance for the full year 2025 for the middle group, including SEWA, for 12 months. Our guidance parameters are again revenue on EBITDA3. For 2025, we expect revenues to reach approximately 2 billion euros, reflecting a growth of around 6%. EBITDA3 is expected to go by around 21.5% to around 96 million euros. Organic growth should be in the middle, seeing the digital percentage range. Both parameters reflect an EBITDA-3 margin of approximately 4.8%. The EBITDA-3 guidance is adjusted for extraordinary expenses like M&A-related costs, expenses for stock option programs, and implementation costs for an ERP system. The summary of our strategic priorities is outlined on slide 17. For this, I hand back to Matthias.

Thank you, Paul. Our growth strategy strongly advanced with SEBAN. Its three pillars are outlined on this slide. Since our last earnings call in November 24, nothing changed regarding our strategic focus. So let me briefly repeat the main. In addition to strengthening our core business in Germany, SEBAN will enable us to further expand our operations into other European countries. And we believe Stepan positions us strongly to benefit from the very positive compounding dynamics in certain European countries, also driven by an evolving, more favorable regulatory environment. We have laid the foundation for the development of an European specialty pharma platform. Also, we intend to further diversify our business model by entering the production of advanced therapies, meaning medicines based on genes, tissues or cells, all expensive and complex therapies in the future of individualized medicine. This is a very good fit for Makos, as we are already a trusted partner for high value trusts in Germany. and we will be one in our new European market as well. Matrius aims to exploit the enormous potential of cutting-edge healthcare technologies in the field of advanced therapies and thus generate additional added value for society. We will use our state-of-the-art GMP labs in Germany and Europe as well as our expertise in compounding to make high-quality personalized therapies available to all patients. As presented by Falk, we have a solid financial foundation and the necessary funds to successfully follow our growth path. This shows that there is a lot of potential ahead for Meteos. Our growth story is well on track. Thank you for your attention. Falk and I am now available to answer your questions. Operator, would you please read out the instructions?