DiaSorin S.p.A.

And thank you for joining the Data Science First Quarter 2025 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Carlo Rosa, CEO of Data Science. Please go ahead, sir.

Yes, thank you, Operator. Good afternoon, and welcome to the quarter one results. As usual, we'll make some general comments about the quarter, and then Mr. DeBrona, our CFO, will drive you through the numbers. So, quarter one was a very good quarter for the story, with revenues of almost $10 million. 7% growth versus Q1-24. If you look at the base business excluding COVID, it's 9% in line with the expectation. COVID revenues, 5 million in the quarter. I remind you that the guidance was for 25 was 2 million, so we are in line with the guidance for COVID as well. It is a margin, 34%, it's a very solid start of the year, with underlying growth in the spice, microbegins, the immuno is back to rising growth, the molecular respiratory did benefit from the flu season in Q1, and it's a very good start of the year for our multiplexing. that grew 25%, and I will comment later, and also for our targeted single target specialties in molecular, which is growing up 14%. And then as far as NTG, we had a very strong quarter, 13% up versus last year. Although, I will comment later, let's make sure that we understand the interfacing effects of certain biocoders in C1. that made this quarter extraordinary in terms of growth. And our 41 performance confirms our guidance for full years of 8% growth of base business revenue and 34% EBITDA margin. Now, let's get into the different segments. Let's start from the immunoregnostics. Immuno-diagnostic ex-COVID grew 8%, in line with expectations and confirming the strong positive trend of immuno, notwithstanding headwind in China. If you look at TRIA, that represents the majority of revenues in immuno, it grew overall 9% in the quarter, driven by the excellent performance of TRIA, our specialty menu, and our U.S. hospital strategy that continues to deliver according to expectations. Clearly, all this is partially offset by the impact in China of GDP. But by the same token, we got the approval in China of our electronic cell manufacturing instrument. Therefore, we expect in the next few quarters that we will be able to react to this negative impact. I will comment more specifically China data. Let's look at World of America, plus 18%. So it continues to be the engine of growth for the S4 in the clear, over 19%. Again, driven by the success of the U.S. hospital strategy. And the 21 placements are in line with fully-arranged expectations and consistent with the 20-25 target of achieving roughly 600 placements for different hospitals in the U.S. And again, as in the previous quarter, this has been possible by the increased commercial footprint following the Linux acquisition. As far as Europe is concerned, plus 5% in quarter one, driven by CLIA, plus 6%. And the result is partially offset by what we discussed, I think, outbreaks in mycoplasma and parvovirus that we experienced in 2014 in some European countries. So, strong growth in the comparison quarter to quarter was unfavorable because, again, an outbreak that happened in 2014 did not happen in 2015. Export pretty much grew in all geographies in line with the overall business growth in the assortment, so not diluted. China with a minus 18% in the quarter. Most of the impact is due to the VBP. The overall effect of the VBP full year is around five million. So this is in line with our expectations. China continues to be a very difficult market. The combination of, again, VBP plus pressure, and also competition by local players, although for the Australia-China representation, less than 3% of revenues, so the impact for the company is fairly limited. And again, last comment, as far as immunodiagnostic is concerned, QuantiFerum continues to be a driver of growth, together with Stultana, and in both cases, we register double-digit growth, And we also have a good performance of all the other infectious disease patients. As far as unit is concerned, our ambition for 2025 is to have 25 new customers ending with approximately 100,000 customers at the end of 2025. And in Q1 we signed 25, so we are in line with achieving as well the target for MIME in number of customers by year end. So we see an acceleration of MIME, which is a combination of the good results that were published on Juneau plus increased adoption due to all the marketing activities that have been initiated in the last two years. When it comes to When it comes to now molecular agnostic, let's move to molecular agnostic. Molecular agnostic X called it GRU7% if you exclude ARIS. ARIS is a platform that was developed by Luminex and we did some set at the end of last year. If we exclude the effect of the Aries sun setting, which is roughly 5.5 million that happened in H1, 2, and 4, and we don't see it any longer in 25. So X-Aries, the growth goes from 7% of molecular to 12% for WDD growth. Multi-flexing quarter one growth of 25% in line with full year expectation. I remind everybody that we share with the market our target to grow the business, the full multi-flexing business by 25% from 60 to 75 million, so see when we are in line, we are in line with that. As far as the year-end flex, Very good performance in terms of placements, notwithstanding the fact that these happen during the flu season, so now we have to take consideration of placements during off-flu season, separating for the next flu season by the end of 2005. One more comment in molecules to do with our targeted molecule business is the, I call which is not multiplexing, it's single-plex, and we continue to have a very strong growth in this segment due to our specialty offering, and I remind everybody that Candida Auris, which was approved a couple of months ago, that is really driving new placement of Lerone MDX. in the U.S. market. We are the only company in the U.S. that can do that. Flex submissions in line with what we have projected and discussed during analyst market day in 2023. So respiratory, as you know, has been approved last year. Blood culture, DCY was approved in 2024. BCN approved in April, a month ago. And we expect DCP to be approved within the next eight weeks. And we are done with the clinical studies for GI and we will submit GI by the end of 2025, so we are in line with expectations and in line with our plan that we share with the market again in 2023. As far as customers for Plex placements, The fact that we now place more systems with flex approach rather than fix is now 60% of customers are using flex and 40% are using fix. But the trend is certainly that placement and adoption is going to move forward, the flexible tunnel, which is a real innovation that we're bringing to the market. And as far as split of labs, 20% of placements are in commercial labs and 80% in hospital labs, which is expected since the majority of the market is in the hospital segment. The other panels are stable as expected. And we are on track for filing LiaisonNet, which is our digital communication platform for flu A to B, COVID and RFC. We are on track for filing in July 2025, and again in line with the timeline that was communicated during our Analyst Day in 2023. Next panel to come that is currently under clinical is Group A Strep. And we expect that we're going to report clinical information is expected by quarter four of 2025. Again, in line with what was communicated to the market. Last but not least, the LPG, the life science technology, is a very solid result in the quarter, 13%. And the strong performance is due to the fact that in diagnostic growth continues to be strong, as well as in pharma customers, and this has been partially upset by the result of life science partners which are more related, linked to the academia and funding and everything that is happening these days in the U.S. Again, the result is also affected by the fact that we have some bad treatments in Q1 that will not repeat in the second quarter, so we reiterate that our expectation is that LTG by year end will grow low-freeze LTG. A couple of comments, and Mr. Pedron is going to go through it. U.S. tariffs, and now we're talking about tariffs and counter-tariffs, which have been now raised primarily between U.S. and China, because, as we know, there are no tariffs as of today for medical products leading U.S. and exporters to Europe. The impact for the group is negligible, non-material. We expect that in 2025 the impact at the EBITDA level is going to be below 5 million. So to the contrary of other companies, what is being reported by other companies, because of the fact that we do have a footprint that is local for local, so a lot of US products are actually manufactured in the US, for the US market. We are not exposed to the targets. At this point, I'm going to turn the microphone to Mr. Cotelan and he will take you through the numbers.

Thank you, Carlo. Good morning, good afternoon everybody. Thank you for joining the 122.125 earnings call and for the interest you are showing in our company. In the next few minutes, I'm going to walk you through the financial performance of the first quarter, and then I will turn the line to the operator for the training session. Q1-25 total revenues at €338 million are above last year by 8%, despite the expected decrease in COVID sales down by €4 million, or almost 50%. The business at COVID is growing in the quarter at constant exchange rates by 9%. The quarry is much better than the earlier guidance because of the strong performance of immune and molecular businesses in combination with some tailwind coming from a couple of five-fourths of LPG classrooms, methods for which we would have been in line with the guidance. The FX impact in the quarry is positive for about 4 million euro. Talking about exchange rate, let me please remind you that since our business is exposed to USD-EUR fluctuations, we might see some FX seduint for the remainder part of the year, considering where the USD is trading now compared with the last 9 months of 2024, which saw an average exchange rate of about 1.08 USD per Euro. As a rule of thumb, let me please remind you, as I've done several times in the past, that for every one-cent movement of the dollar against the euro, the Australian revenues move by about 6 to 8 million euros on a yearly basis, and the adjusted GDP moves by about 2 to 3 million euros again on a yearly basis. First quarter adjusted gross profit at €205 million of 65% of revenues is better than last year by 7%, with a ratio of revenues which is substantially in line with 2024, which closed at 66%. To one, 25 adjusted operating expenses at €118 million increased by 3% compared to 2024, to the rate of revenues of 38% last year. The increased constant exchange rate is just a touch above 1%. and the improvement of the operating leverage would be the main driver of our margin expansion as discussed several times over the last quarter course and during the capital market day we had back at the end of December 23. Other exact operating exchanges negative for 4 million euro are substantially in line with 2024. As a result of what just described, Q125 adjusted interest at €83 million or 27% of revenue is better than previous year by 13% or €9 million. Adjusted interest income at €1 million is slightly lower than last year, which rose at €2 million, mainly because of lower ill on our cash balance, coming mainly from a reduction of interest rate. whereas the adjusted tax rate increased from 23% to 24%, mostly because of the termination of the patent box regime in our Italian leader entity. This measure has not been renewed by the Italian fiscal authority as expected and shared with investors during the last capital market day. Yesterday adjusted the net rebate at 64 million euros, 20% of revenues, and increased by 5 million euros, 9% compared to 2024. And lastly, Q125 adjusted the debat at 107 million euros, or 34% of revenues, is better than last year by 10 million euros, or 10%, with a margin of 34%, in line with our full year guidance. The EBITDA margin of constant exchange rate has increased by about 100 basis points compared to Q1 2024. Let me now move to the net financial position. We close Q1 2025 with a net debt of 672 million euros, 55 million euros more than the end of 2024. This variance is largely driven by the combined effect of a very sound free cash flow generation 42 million euros and a quarter, more than offset by 97 million euros debt towards those shareholders who have exercised their withdrawal rights in connection with the recent adoption of the announcement of the increased voting rights mechanism. Lastly, we confirm 2025 guidance, which is calling as previous year's exchange rates for revenues ex-COVID to grow by about 8%, with COVID sales around €20 million, and an adjusted EBITDA margin at about 34%. Please note that this guidance includes the expected impact of the tariffs recently produced in the different areas which were into business. We all acknowledge that the overall scenario is still in flux, but considering what we know today and the mitigation actions we have already introduced and are about to implement, the estimated impact on our profitability is still not material. With that said, let me please turn the line to the operator to open the Q&A session. Thank you.