Fagron Sa Ord

Hello and good morning, everyone. Welcome to Fagron's Third Quarter 2025 Trading Statement Webcast. I'm joined today by our CEO, Rafael Padilla, and our CFO, Karin De Jong. We will open the floor for questions at the end of the session. And with that, I will hand over to Rafael.

Thank you, Matthew, and good morning, all. We're pleased to report a solid quarter where we achieved normalized organic growth of 8.5% and a 5.7% organic growth at CR when including the phase-out of GLP-1s. This quarter, our Wichita facility underwent a routine inspection by the FDA wherein the agency verified the corrective and preventive actions we set in place and received no repeat observations which validates our remediation actions. The FDA also validated the previously announced capacity expansion that is expected to generate $25 million in revenue. We also continued to execute on our M&A strategy as we announced the acquisition of UCP in the U.S., while at the same time we have received competition clearance for Purifarma and Ingeplus in Brazil. In 2025, we have already welcomed eight companies showing our M&A discipline serial acquired profile. And to finalize, we confirm our full year guidance of 930 to 950 million revenue and a slight increase in profitability year on year. Let us now look at the regional dynamics. In Enea, revenue growth was driven by all segments and contributions from our recent acquisitions. V&E saw an impressive quarter as we reap the benefits of our refined commercial strategy, improved operational excellence, and diversified footprint. In compounding services, we benefited from robust demand combined with new customer wins. In Latin America, growth remains solid with all segments contributing positively. Brands' impressive growth trend remains, reflecting the successful execution of our commercial strategy coupled with our innovation power. Essentials continues to benefit from our market leadership position and an improvement in underlying demand. Turning to North America, B&E organic revenue growth was driven by improvements in operational excellence and new product launches benefiting on the B2A opportunity. Compounding services demand remains strong in both health and wellness and hospital outsourcing. This was offset by the absence of GLP-1 sales and the impact from lower output at the Wichita facility during validation of additional capacity that will generate revenues of $25 million. Finally, the Anadeos Facility investment in Las Vegas, as well as the integration of Kerr First and Bellacorp, remains on track. And in Tampa, we await California license to be able to complete the transition to the new facility. Let's now say a few words about quality. This quarter, our Wichita facility underwent an FDA routine inspection, concluding in no repeat observations, which validates our remediation actions. This year's inspection also validated the previously announced capacity expansion that will generate an additional $25 million revenue. During the routine inspection, the FDA also issued a Form 403 with six observations. Additionally, our analysis facility in Las Vegas was also inspected by the FDA, resulting in a Form 403 with four observations. As we repeat quarter on quarter, quality remains a key differentiator in our industry. With over 35 facilities to audit globally, we're constantly inspected by regulatory bodies across the world to uphold the highest quality standards. Moving on our growth strategy, we're happy to announce one more addition to the group, UCP in California, totalizing eight so far this year. With this acquisition, we're setting up a nationwide platform to better position ourselves to capture the rapidly growing health and wellness market. UCP enhances Anazeo's portfolio and footprint and has a strategic relevance as California is a market with hard-to-obtain licenses. We also received exciting news regarding Purifarma and Ingeplast. The Brazilian competition authority CADE has granted clearance for these acquisitions. This represents an important step forward in executing our disciplined M&A strategy and will enhance our product portfolio and local capabilities in Brazil. The acquisitions are subject to closing conditions and completion of certain local corporate and contractual formalities. The important bit is that with regulatory clearance, we have certainty of closing both deals. Again, so far this year, we have made eight acquisitions following a serial, disciplined, acquired M&A approach focused on market consolidation, enhancing our product capabilities, and geographical expansion around the globe. This showcases our strong momentum. Moving to our full year guidance, we are confirming our revenue guidance to a range of 930 to 950 million euros, while confirming a slight improvement in profitability year on year. CAPEX will remain around 3.5% of revenues, excluding one of projects already announced. To conclude, Fagron is the only global, vertically integrated, niche, defensive, high-cash generating company operating in the pharmaceutical compounding fragmented market. Our resilient business model is fortified by a diverse geographical footprint. These factors, coupled with demographic trends and our emphasis on personalization, are the basis of our success. Our quality focus. together with our ongoing operational excellence initiatives, will optimize our business through global synergies, while a disciplined, serial-acquired M&A strategy remains a key part of our growth. Sustainability is a paramount priority and a strategic cornerstone for us, as together we create the future of personalizing medicine. Let's open the floor now for questions. Thank you.

Thank you. Our first question comes from Stein, the maester from ING. Please go ahead.