Procaps Group, S.A.

Good day and welcome to the ProCAPS Group Business Update Call and Webcast. Today's conference is being recorded. At this time, I would like to turn the conference over to Chris Tyson, Executive Vice President of NZ North America. Please go ahead, sir.

Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the ProCAPS Group Business Update Conference Call and Webcast. We appreciate everyone joining us today, and please note that the ProCAPS third quarter 2021 financial results press release was issued on November 19th, 2021, and the investor presentation can be found on the ProCAPS investor website at investor.procapsgroup.com. Please review the disclaimers included in the investor presentation. Before we get started, I'd like everyone to that statements made during this call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. Any statements that refers to expectations, projections, or characterizations of future events, including financial projections or future market conditions, is a forward-looking statement. The company's actual future results could differ materially from those expressed in such forward-looking statements for any reason, including those set forth in ProCAPS Group's SEC filings. ProCap's group assumes no obligation to update any such forward-looking statements. Please also note that the past performance or market information is not a guarantee of future results. During this conference call and presentation, non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA margin, will be discussed. The company believes non-GAAP disclosures enable investors to better understand ProCap's core operating performance. Please refer to the investor presentation for a reconciliation of each of these non-GAAP measures to the most directly comparable GAAP financial measures. Hosting today's call are ProCAPS Group Chief Executive Officer Ruben Minsky and Chief Financial Officer Patricio Vargas. Finally, this conference call is being webcast. A link to the webcast is available on the ProCAPS IR site at investor.procapsgroup.com. I will now turn the call over to ProCAPS Group's Chief Executive Officer, Ruben Minsky. Ruben?

Thank you, Chris, and thank you all for joining us today on our first conference call for the ProCAPS Group as a public company. You have no idea how excited I am to finally be able to say those words 44 years after we began operations. This is Ruben Minsky speaking, the founder, chairman, and CEO of ProCAPS, I'm also very fortunate to be joined today by our new CFO, Patricio Vargas. Patricio has been hard at work over the last few months, getting up to speed on our business and helping us build the capabilities we need to be successful as a public company. For those of our many shareholders that know Patricio already from his prior roles, including as CFO of CFR Pharmaceuticals, I am sure you share the confidence that I have in his new role. For those that don't know him, I look forward to introducing him to you personally. Welcome, Patricio, to the team. As a general housekeeping, as Chris mentioned, all forward-looking statements are subject to risks and uncertainties, and our results could differ materially from these statements. With that said, I thought I would offer a brief perspective of the quarter and calendar year 2021 before I turn it over to Patricio to take you through the more detailed specifics of the financial statements. From there, We are both happy to answer Q&A, as well as accommodate to any further questions at a later time. As I look at ProCAHPS today, we are at an incredibly exciting time for our history, and there are four key messengers and messages that I really wanted to ensure that I properly conveyed to you. Has exceeded our internal expectations in 2021, and the fundamentals driving our growth remains quite healthy. When we started the PIPE fund raising process in January of this year, we were in the low 300 millions of trailing 12 months net revenues. As of September 30th, we are slightly above 400 millions of net revenues on a 12 month trailing basis, which is ahead of where we forecasted for year end 2021. This is quite encouraging. Four out of our five divisions are growing at double-digit growth rates in terms of revenue throughout the whole year, both to the quarter and the year, and our year-to-date growth rate is 33% versus approximately 20% that we forecasted. Our growth has remained consistent across our products and geographies. When we have repeatedly regarded to the market that we are a mid-teens organic grower, we have seen accelerated growth in 2021, particularly in our Procaps Colombia, Cannes, and Kazan business units, where the increased demand across the board for a variety of our RX and OTC products has continued. Our new product launches have been key drivers of our growth. Our renewal rate, the percentage of our gross revenues from product launches within the last three years, is at 22%. The renewal rate is a key metric that I focus on to measure the health of our business as innovation on our proprietary oral delivery systems is very much a key to our success. As we look at the rest of 2021 and onwards, we continue to state that we expect to achieve a low to mid-teens organic sales growth rate. The second message is that our business continues to internationalize as the sales of successful products outside of Colombia continues to be one of our primary focuses. This is not to say that we aren't performing well in Colombia, where our market share continues to increase two times the market growth rate, and our sales are very robust. We have gone from 3.5% market share in terms of product sales to 5.3% market share in our local market as of September, as measured by IQVIA. Combining all our markets in LATAM, as of September 30th, we continue to be the highest growth pharmaceutical company in the region with a 2.4% market share. However, in addition to this local growth, we internationalized over 67 products this quarter, and our expected pipeline of over 600 product launches in the next three years will be a key driver for the years to come. We have built the commercial capabilities and routes to market to be successful outside of Colombia. We are also considering some opportunities to strengthen our CDMO business in the US market. As having manufacturing capabilities, it is today an important consideration to some of our business partners. We plan to update you shortly on these strategic issues. While our growth in Colombia remains strong, we continue to diversify by region and by product. The third key message is that we are investing significantly behind our innovative product launches to make sure that we are successful to fund future year's growth. As a considerable amount of our accelerated growth is from OTC and RX products, which require significant launch support, we have decided to increase our marketing expenses in order to take advantage of the favorable market opportunities. Giving our products a property in nature, ensuring their initial success, leads to long-term benefits to our company. The fourth and final key message is that we believe that we're properly funded to achieve our growth plans and currently have approximately $100 million of cash in our balance sheet, as well as an ample borrowing capability to achieve our external M&A and internal growth plans. As you can see in our filings, we completed our successful debt rate financing to lower our borrowing cost. Our cost of debt is meaningfully lower, which is one of the benefits to us being a public company. Currently, as we have mentioned in the recent past, we're actively looking at a few attractive investment opportunities that we are carefully evaluating. We will continue to be very disciplined and thoughtful in our M&A process, and Alejandro Weinstein and our team is set to finding the right strategic fits for our business. We're focused on value-creating opportunities to leverage our oral delivery solutions and technology with pharma companies that we can acquire. and geographically, we are focused on Mexico, Central America, and the Andean region. We will provide any updates as applicable, but importantly, we believe we can achieve our stated goal of $1 billion in sales over the next five years, primarily driven by organic growth. We are fortunate to have a tremendous amount of deal-making and industry skills in our M&A team, and our capital structure is set up for success. With that, I will ask Patricio Vargas to review our financial statements before we take Q&A.