Fagron Sa Ord

Hello and good morning, everyone. Welcome to Fagron's Full Year 2025 Results 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 it over to Rafael.

Thanks, Ignacio, and good morning, all. We are very pleased to report another outstanding set of results with full year revenues reaching €952 million. This translates into a 9.1% organic revenue growth at constant exchange rates driven by all regions and segments. Profitability increased 10.9% to 193 million euros, which represents a margin of 20.3%, 30 basis points higher than in 2024. Main contributors were our operational excellence initiatives and a positive sales mix. As you already know, during the year, we also accelerated our M&A efforts and announced 12 transactions across our regions and segments, always maintaining a disciplined approach. Additionally, we have proposed a dividend of 40 euro cents per share, reflecting a 14.3% increase compared to last year. Looking ahead in 2026, assuming no major changes in current market conditions, we expect mid to high single digit organic sales growth at CR and a slight improvement in profitability year on year. Going on to the regions, in EMEA, we had a solid performance. Brands and essentials benefited from underlying demand, improved availability, and our diversified footprint, while compounding services was supported by demand in both sterile and non-sterile compounding, as well as new customer wins. In LARAM, we benefited from strong execution in Brazil. Innovation and targeted commercial actions supported growth. We have also received clearance from the Competition Authority, CADE, for the acquisition of VEPACOM. Finally, in North America Pacific, we continue to see strong underlying demand. Brands and essentials improve on the back of operational improvements and availability, while compounding services continue to benefit from demand trends in both health and wellness and hospital outsourcing. Also, very happy to share that our expansion projects in Wichita and Las Vegas are progressing as planned. Turning to M&A, our strategy remains consistent. We acquired businesses we know well, often partners, where we can strengthen local positions, enter new markets, or expand product capabilities. During 2025 and year to date, we announced 12 acquisitions across all regions and segments, as well as completing two further deals we had announced previously in 2024. As you would have noted, most of the deals we announced in 25 have already been completed with Ingeplast, Amber and Vipacum pending completion. We all remain disciplined and have a clear integration playbook to capitalize synergies in an 18 to 24 months period, being the key levers, procurement, portfolio breadth, operational and commercial synergies. And with that, Karin for the financial review.

Thank you, Rafa. Good morning, everyone. Let me walk you through our full year 2025 results and share more details about our 2026 outlook. In 2025, revenue increased 9.2% on a reported basis to 952.2 million. In organic terms, at constant exchange rate, the group grew 9.1%. Gross margin increased by 30 basis points to 62.6%, supported by sale mix and procurement and manufacturing savings. Operating expenses increased to support volume growth. At group level, our profitability expanded 30 basis points year in year to 20.3%, demonstrating our improved operational capabilities and synergies from acquisitions. Moving on to the next slide, the bridge shows our revenue development for the full year. EMEA delivered 4.2% organic growth at CER, supported by broad-based demand and contributions across segments. Latin America delivered 14.1% organic growth at CER, driven mainly by strong performance in Brazil. North America Pacific delivered 10.8% organic growth at CER, supported by compounding services and continued progress in essentials. M&A contributed to reported growth, while FX was a headwind. On the right side in the table, you can see the non-recurring items. They were limited at €0.3 million, mainly acquisition-related costs, partly offset by an earn-out release. Depreciation and amortization increased, mainly reflecting purchase price allocations from acquisitions. And the financial result was a cost of 28.6 million higher than last year. This was mainly driven by an increase in currency differences of 1 million due to volatility of the US dollar throughout the year. The remaining is spread over the different categories, such as interest on leasing and other financial costs. The effective tax raise was stable at 22.2% versus 22.3% last year. And as a result, net profit increased to 91.5 million and earnings per share increased to 1,25 euro, a 13.6% increase on the prior year. Moving to EMEA, so revenue increased to 355.1 million with 4.2% organic growth at CER, supported by underlying demand and the contribution from acquisitions. Rebida increased to 77.9 million and the margin improved to 21.9%. The margin improvement reflects operational excellent benefits and sales mix. And as highlighted by Rafa, we also strengthened the region through acquisitions. Turning to LATAM, revenue increased to 183 million with 14.1% organic growth at CER, partly offset by FX. Performance was supported by strong underlying demand and new product launches, particularly in brands. Brands revenues this year represent 38.1% of LATAM's total revenue, an increase of 360 basis points. Rabida increased to 33.6 million, with a margin slightly higher at 18.3%. The margin in the second half of 2025 was 19.2%, reflecting the seasonality effect in this region. We also made progress on M&A execution, firstly with the completion of Purifarma, and we also received CADA clearance for Fupacum and expect that to complete soon. INSHAplus is still to be completed. Moving to North America Pacific, Revenue increased to 414.1 million, with 10.8% organic growth at CER. Brands and essential performance remained strong and was mainly supported by improvements in product availability and supply chain. Compounding services remained strong despite the absence of GLP-1 shortages during the second half of the year. The higher operating expense is mainly related to the need to accommodate the growing volumes coming from high market demand, while the revenue margin expanded by 20 basis points to 19.7% as we continue to improve our operational excellence activities. We also expanded the business through the acquisitions of Care First and UCP and also including entry into Australia through Bellacorp. Looking at our cash flow now, a high level of cash conversion remains as one of the main strengths of our business model. Operating working capital increased by 10 basis points to 12.1% as a percentage of analyzed revenue. Operating cash flow increased by 41.3% to €155.3 million. Normalised capex, adjusted for one-offs, ended at 3.1% of revenue, in line with our guidance. And lastly, free cash flow conversion reached 65.3%, reflecting continued discipline on capex and working capital. Our NetDap evolution for the year shows a modest increase to 283.3 million, reflecting acquisition and investments during the year. Despite this, leverage improved with NetDap to EBITDA at 1.2 times, and we remain well below our internal threshold of 2.8 times. This keeps sufficient headroom to pursue opportunities while maintaining a prudent balance sheet. Finally, our outlook. For 2026, assuming no significant changes in market conditions, we expect a mid to high single-digit organic growth at CER. We also expect a slight year-on-year increase in profitability, with the second half expected to be stronger than the first half. CAPES is expected to remain at around 3.5% of revenue, excluding one-off projects, and our mid-term guidance remains unchanged. And with that, I will hand back to Rafa for the conclusion.