Medios AG

Ladies and gentlemen, welcome to the conference call of Medios. 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 your questions. If any participant has difficulty hearing the conference, please press 0 followed by the hash key for operator assistance. May I now hand over to Claudia Nicolau, Head of Investor Relations. no, sorry, Head of Investor and Public Relations and ESG Communications at Medios. Please go ahead.

Thank you. Welcome, everybody, to our earnings report for the first half of 2025. 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 to 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 of the first half of 2025 and the guidance for 2025. Finally, Matthias will comment on our growth story. 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 first half of 2025. Let me start with the highlights and achievements for the first half of 2025 on slide 3. We had a very good first half of the year and I am proud to present the positive development today together with my colleague Falk. Again, we posted increased profitability. And I would like to highlight the strong organic earnings growth. Revenue grew by 9.3% to almost 1 billion euros, now standing at 992 million euros. All segments contributed to growth, meaning organic and inorganic growth. EBDA3 again increased its proportion to 3 by 48.8% to 46.3 million euros, driven by all three operational segments. Regarding EBDA contribution, we are very satisfied with both the PLs and the PIT segments, only the international business segments However, we are confident about future development here. I am particularly blessed with the organic earnings growth of 12.3% on EBITDA3 level that significantly exceeded our target of growth in the mid-single-digit range. Consequently, we substantially improved our EBITDA pre-margin from 3.4% for the first half of 24 to 4.7% for the first half of 25. Furthermore, EPS increased by 85.2% to 50 cents. EPS adjusted increased by 34.1% to 0.96 euro. At the request of various investors, we will now also report on the adjusted EPS every quarter. The strong and recovering operational cash flow in Q2 almost compensated for the negative working capital swing effect on the first quarter. All in all, we have once again succeeded in increasing our overall profitability. This confirms the operational strength of our company. and our strategy, which is focused on increasing margins while maintaining growth. Based on these results, we fully confirm our guidance for the year 2025. FALT will provide more insights into the financials later. Now a brief update on the search for a new CEO. As outlined in our last earnings call, I have decided to step down as CEO and do not stand for another term of office. There is already a shortlist of CEO candidates so that the supervisor report could come to a decision quite soon. I am still confident that I will be able to hand over to a successor ensuring a smooth transition until 31st of December 2025 at the latest, as agreed with the supervisor report. Furthermore, it is worth mentioning that our shareholders approved all resolutions proposed by the executive and supervisory boards at our annual general meeting in May with a large majority of more than 90%. Certainly one of the best AGM voting results we have ever had. More to this in a minute. We have also made progress in implementing our growth strategy and we are fully on track with the integration of Sabarn and our growth initiatives. In the second quarter of 25, all planned integration steps have been successfully completed. This enables the Sabarn team to shift their focus fully towards commercial and business development opportunities utilizing the strong and leading platform of both Mateos and PayPal. The first synergies were realized in the beginning of 25 and we successfully continued this momentum into the second quarter of 25. Looking ahead, we remain focused on further unlocking the full potential of synergies between the two companies. This process is strongly supported by our European platform, giving us a 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-training opportunities. Furthermore, it will support the development of our activities in the field of advanced therapies, the future of individualized medicine. For the first time, we successfully conducted a share buyback of 1 million Metals shares, representing 3.92% of our current share capital. Therewith, we have responded to the wishes of many shareholders and to our conviction that the share price does not reflect the full value and potential of Metals. Furthermore, we might use this treasury share, depending on capital market and business development, for a stock option plan or as currency in M&A or withdrawal and capital reduction. Falk will present the details of the program shortly. Let's switch to slide 4, providing a short overview of selected agenda items for our which took place on May 27. As said, all proposed resolutions were approved by a large majority of shareholders. With these AGM resolutions we have a modern remuneration system for the executive board in place with the new component operational cash flow replacing inorganic flows as part of the short-term incentive. An overview of the current remuneration system can be found in the appendix of the presentation. We launched an attractive new stock option plan 25 and implemented the related conditional capital. We received a new authorisation to issue convertible bonds and the respective conditional capital. In a nutshell, we are well financed and ready and well positioned to continue implementing our growth strategies by financing strategic investments, supporting M&A activities or advancing our internationalization efforts. Now some further comments on the financials for the first half of 2025. Slide 5 shows the quarter-on-quarter development of our two KPIs, Revenue and EBITDA-3. For the first time in our communist history, we have exceeded the half a billion euro revenue mark in one single quarter, while significantly increasing the EBDA-free margin of the second quarter, 24. In Q2 of 25, EBDA-free and the respective margin of 4.6% grew significantly compared to last year. This was driven by positive momentum from all operating segments and our strategic focus on higher margin progress. This positive development is also reflected on slide 6, illustrating the revenue and disproportionate EBITDA pre-growth for the first six months, whereas revenue increased by 9.3%, EBITDA pre-growth strongly by 48.8%, with a corresponding margin of 4.7% compared to 3.4% in the first half of last year. As just said, this is fully in line with our strategy to focus on higher margin products to achieve an overall margin improvement. 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 2025 and the guidance for 2025.

Thank you, Matthias. Welcome also from my side. I will give you now a more detailed overview of the financials for the first half of 2025. You can, of course, find the full financial statement on our website. Let's go to slide 8. All in all, we had a strong first half year 2025. Revenue rose by 9.3% to 991.7 million euros, many driven by the operational segment ID, inorganic fee, and PS organically. Growth profit of Mises Group improved significantly to 101.1 million euros from 60.4 million euros in the previous year. This is an increase of 40.8 million euros and a substantial increase of the growth profit margin to 10.2% compared to 6.7% in the previous year. This improvement is mainly caused by the inorganic contribution of the segment IB which contributed 31.8 million euros gross profit and higher gross profit margin. Gross profit of the PST segment rose by 4.9 million euros and reached a gross profit margin of 23.6% compared to 19.9% in the previous year. This was caused by organic growth, a better product mix, but also the elimination of performance-based payments for compounding orders in the amount of 3.3 million euros. The gross profit of the peer segment increased organically by €4 million, reaching a gross profit margin of 4% compared to 3.6% in the previous year, also reflecting the focus on revenues with higher margins. The net cost rose by €15.5 million to €35.9 million. The essential part of the gross of €30.5 million is attributable to segment ID. In addition, an amount of €0.5 million is caused by a modest personnel cost increase in PS and PC. As an extraordinary cost item, €1.3 million personnel expenses of segment services are attributable to the communicated termination of executive board contracts. Other operating expenses rose from €15.4 million to €23 million. an increase of €7.6 million, thereof €7.2 million attributable to segment ID. The EBITDA-3 increased to €46.3 million compared to €31.1 million in the previous year, mainly following the growth of its development. The EBITDA-3 margin increased to 4.7% compared to 3.4% in the previous year and was supported by the EBITDA contribution of the segment ID, and the organic growth of PF and PST also by focusing on high amount of products. Even though we were adjusted by extraordinary expenses in the amount of 4.1 million Euro compared to 6.6 million Euro last year, these expenses mainly consist of 2.4 million Euro for ERP system implementation, 0.4 million Euro expenses for stock options, and €1.3 million warm-ups related to the change in the executive board. The decline in overall adjustments is mainly attributable to the discontinuation of performance-based payments for increased compounding volumes in 2025. Depreciation and amortization increased significantly by €6.9 million to €18.8 million, largely due to the acquisition of the C-Bahn Group. Of the total amount for depreciation and amortization, 12.1 million Euro are attributable to the amortization of customer base, 2.6 million Euro are attributed to lease assets and the remaining amount of almost 4 million Euro belongs to operational depreciation. The financial result of minus 4.3 million Euro decreased by minus 2.8 million Euro and mainly includes interest expenses for the tranches utilized from the facilities of the existing SIN loan, which amounted to 167.5 million Euro at the reporting date. The tax expense rose from 3.7 million Euro to 5.4 million Euro, reflecting a tax rate of 29.7% compared to 36.8% in the previous period. The decline in tax rate is mainly caused by non-tax deductible expenses in the previous year. Due to the strong performance of all operational segments plus the described reduction in extraordinary expenses, the net result almost doubled to 12.7 million euros, despite higher depreciation and financing costs. That earnings per share rose from 0.27 euros to 0.50 euros, an increase of 85.2%. As outlined by Matthias, for the first time we've reported also the adjusted earnings per share that amounted to €0.96 versus €0.72 for the first six months, 24. This figure is based on the net result after tax adjusted for extraordinary expenses, PPA depreciation and amortization, as well as corresponding tax expense adjustments. Due to reporting date-related networking capital effects, the strong operational performance of the first half of 2025 is not fully reflected in the operating cash flow of 23.4 million euros. This is mainly due to a rise in trade receivables in the segment TS and ID at the reporting date. Speed cash flow of 20.5 million euros is consequently also impacted by the same networking capital effects. Investing cash flow of minus 0.9 million euros reflects capex of minus 2.4 million euros and subsequent accrued purchase tax payments for the acquisition of Saban of minus 1.5 million euros as well as cash inflows of 2.4 million euros from the disposal of fixed assets in the sale of the pharmacy in the Netherlands. Financing cash flow of minus 40.9 million euro reflects total repayments of 32.5 million euro of the SIN loan facility consisting of minus 12.5 million euro scheduled redemption of the term loan and minus 20 million euro net repayments of the devolving credit facility interest payments of minus 5.7 million euro mainly related to SIN loan facilities and lease liabilities repayment of minus 2.5 million euros. Cash and cash equivalents of 87.8 million euros by the end of the reporting period consisted mainly of freely available bank deposits. The equity ratio increased from 54.6% at the end of December 24 to now 57.0%. On slide 9 and 10, we provide a breakdown of the organic and inorganic growth. Slide 9 shows that inorganic revenue growth amounted to 66.9 million euros or 7.4% fully dedicated to the IB segment. Organically, revenue increased by 17.6 million euros or 1.9%, mainly by focusing on higher margin revenues in segment PS. Slide 10 shows the organic and inorganic EBITDA-free breakdown by segment. EBITDA3 increased inorganically by €11.4 million or 36.5%, fully dedicated to IT segment. Also, both PS and PST show organic earnings growth. The EBITDA3 development in segment services reflects a thoughtful structural expansion of the new strategic segment about therapies, but also increased board remunerations. Let's go to slide 11, providing an overview of the segment. The 9.3% increase in group revenue is mainly driven by a lead and to a lower extent by PS and PSD. The external revenue of PS segment increased by 1.5% to 800.1 million euros and of PSD segment by 2.5% to 110.2 million euros. The IB segment contributed 81.1 million euros external revenue in the first six months, which is an increase of 69.6 million euros. EBITDA3 for the PS segment amounted to 26.4 million euros, a plus of 3.5 million euros, or 15.4%. EBITDA3 for the PST segment increased by around 1.2 million euros to 12.5 or 10.8%. IB contributed with an EBITDA-3 of 13.8 million euros for the first half of 2025 at a margin of 17%. As outlined by Matthias, IB is slightly below our expectations, but we are confident that the segment will develop positively. At 12 provide status information on the recent financing structure. In November 24 the debt financing of Meteos was replaced by a SIM loan facility in a total amount of 225 million euros consisting of two transfers. Term loan facility of 125 million euros with a term of five years. Repayment started in March 25 and for the first half 25 we repaid 12.5 million euros. A revolving credit facility of 100 million euro also with a term of five years. The RTF has a term extension option of up to two years and a step-up option of further 50 million euro to finance future growth. An estimated free cash flow of 40 to 50 million euros enables Medias to repay the term loan and to finance further growth. At the end of the reporting period, the total loan amount drawn under the SIM loan agreement amounts to €167.5 million, €112.5 million under the term facility and €55 million under the RTF facility. Slide 13. Let me now address another important milestone that underscores our strategic shareholder-centric approach. We successfully completed our first public share buyback offer in June. The offer was very well received by the market and I am pleased to report that we acquired 1 million shares, which corresponds to approximately 3.92% of current share capital. The offer was made at a price of 12.4 euro per share, reflecting a premium of approximately 9.3% over the five-day etc. average closing price, underlining our strong confidence in the long-term value of Medios. In total, more than 1,077,000 shares were handled by our shareholders, which reflects an allocation quota of 92.78%. The buyback was conducted under the authorization granted by our shareholders at the 2023 Annual General Meeting which remains valid until June 2028. The acquired shares could be used flexibly as permitted by the AGM resolution for purposes such as employee participation programs, share based compensation or strategic considerations in M&A transactions. Overall, we are confident about the business development over the next month and confirm our guidance for the full year 2025 as shown on slide 15. Our guidance parameters are revenue and EBITDA-3. For 2025, we expect revenues to reach approximately 2 billion euros, reflecting close of around 6%. EBITDA-3 is expected to grow by around 21.5% to around 96 million euros. Organic growth should be in the mid-single-digit percentage range. Both parameters reflect an EBITDA pre-margin of approximately 4.8%. The EBITDA pre-guidance is adjusted for extraordinary expenses like M&A-related costs, expenses for cross-option programs, and implementation costs for an ERP system and as explained as well as from 25 on one off expenses due to the change in executive board. A summary of our strategic priorities is outlined on slide 16. For this I am back to Matthias.

Thank you Paul. The three pillars of our growth strategy are outlined on this slide. Our half-year results show that we are making good progress in implementing our strategy, particularly in terms of margin improvement through focusing on higher margin products and services and the internationalization of our business model. The organic EBITDA field growth in our segment PS of 3.5 million euros and PSB of 1.2 million euros representing organic growth of 12.3% for the first half of 2025, also shows that we are continuing to strengthen our business model in Germany. With SEBAN we have achieved internationalization. The first effect synergies are currently being implemented. We are also making good progress regarding our activities in the field of advanced therapies. We received the manufacturing license for gene therapeutics for a customer-specific project at one of our sites near Stuttgart. There we are building out our capabilities in small-scale formulation till finish for personalized cancer vaccines based on mRNA and or peptides. We also have the special expertise required by law in the field of gene therapeutics among our employees. This development confirms that we are making progress in reaching our goal to the perfect partner for the biotech and pharmaceutical sectors in the future and keeping our promise, delivering the best therapies to patients. Regarding M&A, we have demonstrated that we have the necessary tools and strength for further inorganic growth. We have a short list of interesting opportunities, namely bolt-on acquisition. In a nutshell, we are on track to further implement our strategy and to ensure further attractive growth. Thank you for your attention. Falk and I are now available to answer your questions. Operator could you please read out the instructions.