Straumann Holding AG

Ladies and gentlemen, welcome to the Straumann Group full year 2025 results conference call and live webcast. I would like to remind you that all participants have been listened only mode and the conference has been recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcasting. At this time, it is my pleasure to hand over to Guillaume Daniello, CEO. Please go ahead, sir.

Thank you, and good morning or afternoon to all of you. Thank you for attending this conference call on the Stroman Group's full year 2025 results. Please take note of the disclaimer in our media release and on slide two. During this conference call, we are going to refer to the presentation slides that were published on our website this morning. As usual, the discussion will include some forward-looking statements. As shown on slide three, I will start with the 2025 performance overview. Isabelle will then cover the financial details, and afterwards, I will share strategic updates and our outlook. We will be happy to answer your questions at the end of the presentation. Then let's move directly to slide five. Thanks to a strong full year of performance, I would like to start by highlighting that we have created more than 7.3 million smiles in 2025. In other words, together with dental professionals, we've supported around 10% more people improving their oral health and confidence than in the previous year to keep delivering on our purpose, unlocking the potential of people's lives. Now, let me share how we have progressed in 2025 by moving to slide six. 2025 has been a very dynamic year, and I'm very pleased with the results we delivered. We achieved a strong growth with a revenue reaching 2.6 billion Swiss francs, representing an organic growth of 8.9% supported by a very strong fourth quarter despite the uncertainties around the GDP in China. On a reported basis, growth in Swiss francs was 4.1%, which represents a translation impact of around 100 million Swiss francs of revenue. Despite these currency and tariff headwinds, we intensified our focus on efficiency, generating gains that supported our improved profitability. Our core EBIT margin excluding currency headwinds increased year-on-year 26.5%, which correspond to 25.2%, including currency effects. These results clearly demonstrate the resilience of our business model and the discipline execution across the board. On the innovation side, 2025 was a year of record launches. Starting with the premium implant segment, innovation remains the primary growth driver. It is the foundation on how we all perform the market and gain share. In 2025, this strategy is translated in a record year of new product launches, reflecting both the depth and speed also of our innovation pipeline. IXL is an excellent example. We have already sold more than 1 million IXL implants, making it the most successful implant launch in our history. This performance demonstrates not only strong market adoption, but also the relevance of our innovation for clinicians worldwide. In parallel, we have seen a strong momentum of our Sirius X3 intraoral scanner since its launch in October 2025, significantly expanding the clinician base being connected to our Stroman Group digital ecosystem. On the transformation side, the partial transition of the ClearCrate manufacturing to Smarty is well on track. boosting our value proposition and supporting scalable and profitable growth in orthodontics. Overall, those very promising progress gives us confidence as we enter 2026. Looking ahead, we expect another successful year with continued market share gains and high single-digit organic revenue growth along with further profitability expansion of 30 to 60 basis points in the core EBIT margin at constant 2025 currency rates. Now, let's have a look at the regional performance on slide seven. Thanks to our large geographical presence, we delivered strong growth across the year and in the fourth quarter, especially looking at the strong comparison basis of 2024. Let's start with EMEA, both our largest region and biggest gross contributor for the group. EMEA performed particularly strong in the fourth quarter, leading to a full-year organic growth of above 11%. This was achieved across premium and challenger implantology, digital solutions, and orthodontics, which supported our continued market share gains across all markets. In North America, Performance improved through the year, reaching a strong organic growth of 6.8% in the fourth quarter. This sequential acceleration is particularly significant as North America remains a strategic market for the Stroman Group. This progress reflects the impact of a strengthened leadership team, sharper execution, and the contribution of recent product innovations all of which are driving more consistent performance and stronger market traction. Growth in the fourth quarter was supported by implantology, digital solutions, alongside continued momentum in the DSO segments, underscoring improved operational focus and disciplined execution. Moving to Asia Pacific, the region delivered solid underlying organic growth of around 7% for the full year. driven by strong momentum outside China, where we achieved a growth of more than 10%. Countries such as India, Japan, and Southeast Asia continued to perform well, supported by challenger brands, digital workflow adoption, and strengthened education activities. In China, performance during the second half of the year was significantly impacted by a softer patient flow and distributor destocking behavior, particularly linked to the upcoming VVP process. Despite the seasonal VVP impact, we believe that the underlying fundamentals of China remain intact. With the ongoing ramp-up of our Shanghai manufacturing campus, we are strengthening local production capabilities and supply chain resilience, positioning us very well for the next VVP round. Latin America, once again, delivered very strong performances with a high double-digit organic revenue growth of around 18% for the year, driven by , continued market expansion of our Stroman Premium brand, and fast adoption of our new digital equipment . Growth was strong both in the full year and in the fourth quarter, and the region contributing 17% of the group's total organic growth. With this, I will now hand over to Isabelle, who will take you through the financials in more detail.

Thank you, Guillaume, and good morning also from my side. It is a great pleasure to walk you through our financial highlights of 2025. Let me start on slide nine with how we translated our strong growth in 2025 into solid cash generation. We delivered revenues of 2.6 billion Swiss francs, which translated into a core gross profit margin of 70.1%. This is a strong result in a year marked by elevated investments and external headwinds and driven by our productivity improvements and the favorable product mix. The strong gross profit flowed through to profitability. As Guillaume mentioned, we achieved a core EBIT margin of 25.2%, including currency effects. or 26.5% at constant 2024 exchange rates. This was driven by disciplined execution, targeted OPEX measures, and operating leverage, and demonstrates our ability to protect and improve margins despite of acceptance and tariff-related pressure. At the bottom line, our core net result reached 478 million Swiss francs, corresponding to a net margin of 18.3%, supported by the quality of earnings and effective cost management across the entire group. Importantly, the strong operating performance translated into cash. We generated a free cash flow of 290 million Swiss franc, representing 11.1% of net revenue, and influenced by tactical working capital management decisions, as well as one of the highest investments years in our history. This also marks the ending of a large manufacturing investment cycle for future growth. Overall, this clearly shows that we not only delivered strong growth in 2025, but also successfully converted this growth into profitability and cash generation, fully in line with our guidance. With this overview, let us now look at the individual line items in more detail, starting with gross profit on slide 10. Compared to the prior year, the margin was only slightly lower with 70.1%. This development was mainly driven by two factors. Firstly, the impact from U.S. tariffs, and secondly, the ramp-up of production at our Shanghai campus, which weighed on margins during the year. These effects were partly offset by our strong product mix and productivity improvements across the group. Overall, the gross margin development reflects the strength of our portfolio mix and our ability to further automate our production while maintaining a high and resilient margin profile. With this, let me now turn to slide 11 and discuss EBIT in more detail. Bragging exchange effects had a visible impact on our profitability. While revenue growth differed by around 480 basis points between local currencies and Swiss francs, only around 130 basis points of X impact flowed through to the EBIT line. This reflects the effectiveness of our local for local production strategy and the structural improvements we have implemented across our supply chain, which significantly reduced the sensitivity of margins to currency movements. In addition, cost saving and efficiency measures contributed around 120 basis points to the EBIT margin improvement. These measures were implemented across the organization and focused on operating discipline, prioritization, and productivity while continuing to invest in our strategic priorities. Overall, Abbott development shows that we were able to translate strong growth into improved profitability, even in an environment characterized by currency volatility, tariffs, and cost pressure. Looking ahead, It is important to note that the ClearCorrect Smarty partnership was only announced in October and therefore has not yet had a meaningful impact on EBIT margin in 2025. As part of the production transition during 2026, we expect to see positive effects on margin, especially in the second half of this year. Against this backdrop, let me now take you to the net results from slide 12. The financial result was slightly lower compared to the prior year. This was mainly driven by the effects of currency hedging, reflecting the volatility in foreign exchange markets. Taxes were somewhat higher, as a larger share of profits was generated outside of Switzerland, which is also a consequence of our local-for-local production strategy. As in previous years, we present core results in addition to IFRS results to facilitate a like-for-like comparison. In 2025, non-core items amounted to around 120 million Swiss franc after tax. A significant part of these non-core items related to restructuring measures, which are directly linked to strategic decisions we have taken to strengthen our operational setup. We transferred implant volumes for the Chinese market from Switzerland to our new manufacturing campus in Shanghai. And furthermore, restructuring costs were incurred in connection with the transformation of the orthodontic business. In addition, non-core items include acquisition related amortization and special items. Legal costs as well as impairment related to the planned relocation of the group's headquarters to our new campus in Alisign. From here, I will move on to the cash flow and investments on slide 13. In 2025, we generated a free cash flow of 290 million Swiss francs. This is particularly noteworthy given the very high level of investments during the year. Capital expenditure amounted to 223 million Swiss francs, an increase of 56 million Swiss francs compared to the previous year, making 2025 one of the strongest investment years in the group's history. These investments were focused on clearly defined strategic priorities. They include the expansion of production capacity, most notably the ramp-up of our Shanghai manufacturing compass, Medentica, and the new SID production site in Curitiba, as well as continued investments in innovation, digital infrastructure, and operational efficiency. Despite this elevated CAPEX level, cash conversion remains solid. This reflects strong operating performance and working capital management across the group. Overall, this combination of high investments and strong free cash flow demonstrates our ability to invest for future growth while maintaining financial flexibility and balance sheet strength. With this, I will now move to slide 14 and the proposed dividend. Based on our strong performance in solid cash generation, the Board of Directors proposes a dividend of one Swiss franc per share, which is subject to approval at this year's annual general meeting. This represents an increase of 5% compared to the prior year and corresponds to a core payout ratio of around 33%. This is in line with our capital allocation priorities to maintain and increase dividends with earnings. With this, let me now briefly touch on our efforts and progress in sustainability on slide 15. Before I turn to the details, Let me briefly highlight that the annual report published today includes our sustainability report prepared in line with CSID requirements for the first time. This reflects our commitment to transparency and regulatory alignment. In 2025, we continue to make progress across our key sustainability priorities, closely linked to our strategy and operations. As part of our long-term growth strategy, education remained a central pillar for the group. During the year, we trained more than 370,000 dental professionals worldwide, with around 42% of all education activities taking place in low- and middle-income countries. This shows our continued efforts to broaden access to care and enables the adoption of modern, efficient treatment approaches across regions. On climate, we continue to move towards our net-zero ambition. We further reduced our scope one and two CO2 emissions by around 17% compared to 2021, and 98.5% of our electricity consumption now comes from renewable sources. This reflects the fact that renewable electricity is increasingly embedded as an operational standard rather than an aspiration. In addition, our local for local manufacturing strategy contributes not only to resilience and efficiency, but also to sustainability by reducing transportation needs and strengthening regional supply chains. Overall, sustainability at Strahmann Group is closely integrated into how we operate the business and supports long-term value creation for patients, customers, and society. With this, I will now hand back to Guillaume for the strategy update and outlook.