Galderma Group Ag U/Adr

warm welcome to Goderma's 25 first water trading update call. As customary, the press release was published at 7 a.m. Central European Standard Time today and can be consulted on our corporate website at any time. Today's presentation slides, as well as recording of the webcast, will be made available on our website after the call. Please be advised that today's presentation contains forward-looking statements which should be treated with the appropriate level of caution as advised on this slide. Let me now introduce today's trading update webcast. Dr. Flemming Onskov, CEO of Golderma, will provide a performance update for the first quarter, including key highlights by product category. Thomas Dittrich, CFO, will then introduce the trading update and the financial outlook for the year. Both Flemming and Thomas will be available to answer questions from the financial analysts before Flemming provides his final remarks to close the webcast. With this, I would like to invite Flemming to start the Golderma highlights for the first quarter of 2025. Flemming, over to you.

Thank you, Emil. Good morning, good afternoon, and welcome to Golderma's first quarter 2025 trading update webcast. We are proud to report record performance ahead of expectations and a strong start to what we expect to be a year of opportunity for Golderma. There are five key opportunity areas for Galderma in 2025. This is the first of two years with significant launches. This includes the introduction of our two biologics with blockbuster potential, Nimluvio and Ralphides, along with Sculptra in China and also in South Korea later this year, Restylane Shape in Brazil, and continued innovation in dermatological skincare. For 2026, we have further launches planned along the same trajectory. We'll also continue expanding our fillers and bio-stimulators offering, including launches of multiple Restylane indications in the U.S. We're confident that our continued focus on industry-leading innovation, focused commercial execution, and commitment to training and education will fuel growth acceleration of injectable aesthetics toward our mid-term guidance. Global market share gains remain a major opportunity. In international markets, our largest geography and growth driver, we continue to see strong momentum in under-penetrated high-growth markets. As for the US, we maintain modest growth expectations, excluding, of course, Nemluvio, given ongoing volatility and market uncertainty. We continue to strengthen our financial profile. This includes ongoing progress on our rapid deleveraging trajectory and sustained robust cash flow, contributing to a stronger balance sheet. We're now in a position to focus on long-term growth. With more strategic optionality, we can invest in an additional pipeline opportunity Organically, we have differentiated innovation across our product categories, including plans to explore additional indications for nemolysmia. These will be announced later this year. We also have the option to explore external opportunities where we see a strong strategic fit. Last, but of course not least, we maintain a dynamic approach to commercial investments to drive continued growth. Our broad portfolio and international exposure helps us navigate external challenges and market volatility. Galderma has a proven resilient business model as demonstrated since becoming an independent company in October 2019. Over the past years, we have set a strong foundation for our company. With that in place, I'm excited about what we can achieve this year and beyond. Let's look at our financial highlights for the period. Gilderma achieved a record 1.1 billion US dollars in net sales for the first quarter. These results are ahead of expectations with net sales benefiting from focused execution, some favorable facing and injectable aesthetics, and a stronger than expected ramp up of Nemlou. For the period, growth was up 8.3% year-on-year at constant currency with broad-based growth across product categories and across geographies. Growth was primarily driven by volume, complemented by favorable mix. Following the strong start, we are confident our full-year guidance of net sales growth of 10% to 12% and a core EBITDA margin of approximately 23%, both at constant currency. This reflects both our strong growth trajectory, where we still expect growth acceleration as of the second quarter, and our manageable exposure to current U.S. tariffs, which we will discuss later. Importantly, our over-delivery in the first quarter increasingly de-risked our guidance for the year. This gives us flexibility to absorb some further tariff impact and some consumer demand-related pressures. With these achievements, and despite ongoing economic and geopolitical volatility, we remain confident in our guidance and are firmly on track to meet our full year targets. Moving to our detailed performance update. Galderma started the year strong with broad-based growth across product categories and across geographies, starting with our product categories. In injectable aesthetics, net sales grew 9.9% year-on-year at constant currency. Newer modulators grew by an impressive 21.4% with double-digit growth across geographies. The majority of newer modulator growth was driven by focused execution and continued market share gains, including the Ralphie Desk launch, while also benefiting from some favorable facing. Fillers and biostimulators declined 2.3% impacted by a very strong Q1 2024 comparative base in the US, despite double-digit growth in international markets. Overall, We gained market share in key markets across both neuromodulators as well as fillers and biostimulators. In dermatological skincare, growth for the period was 7.8%. Both of our flagship brands, Cetaphil and Elastin, continued their strong trajectory with strong performance in international markets. In therapeutic dermatology, growth was 4.9% driven by a strong ramp-up of Nimluvio sales. We reported $39 million in the first quarter ahead of expectations. As expected, our mature therapeutic dermatology portfolio, excluding Nimluvio, declined due to anticipated lower volumes and pressures from generics. Looking at growth by geography, international markets, Galderma's larger geography and main growth contributor delivered continued double-digit growth, up 10.4% for the period. Performance was strong in both injectable aesthetics and in dermatological skin care. And Europe reported its first Nimluvio sales. The U.S., returned to growth, up 5% for the period. This was driven by strong uptake of nemluvio in atopic dermatitis and in periglobularis, alongside growth in injectable aesthetics and in dermatological skin care. Over the next slides, I'll cover key highlights by product category. Let's start with injectable aesthetics. We saw several innovation milestones in international markets further broadening our science-based portfolio. Ralphie Death, our next-generation liquid neuromodulator, was featured at two major European aesthetics congresses. At the International Master Course on Aging Science World Congress, IMCAS, in Paris in January, we reinforced our leadership in education and in training. Two, Galderma Symposium, were among the five top-rated sessions of the Congress. At the 23rd Aesthetic and Anti-Aging Medicine World Congress, AMWC, in Monaco in March, Galderma was recognized with two awards voted by healthcare professionals. Ralph Fidesz was named Best Neuromodulator, and Restylane Lift was awarded Best HA Injection. Rafides is off to a strong start in its first markets. Now approved in 18 international markets, it's available in Southern Europe, Germany, Australia, the Nordics, and Poland. We also accelerated the launch of Sculptra in China, marked by a major launch event just last week. Early signals are very positive. with first sales already coming in from our pre-launch activities. Additionally, Restylane Shape was recently launched in Brazil. In just one month, we reached over 2,500 healthcare professionals through early engagement. This included dedicated events and trainings, local congress symposium, and 100 injection demonstration workshops. In terms of advancing and amplifying our in-market execution, we've seen strong efforts and results across markets. To share some highlights, we launched a re-energized global campaign for Dysport, highlighting its efficacy and proven results. In the US, this was underpinned by strong sales representative engagement and activation through Aspire, our loyalty program for both consumers and healthcare professionals. Together, these efforts helped us gain further market share for Dysport. We activated our Journey of Glow campaign in Asia, focused on empowering individuals on their skincare journey while highlighting the strengths of Gilderma's injectable aesthetics portfolio. This campaign featured key products like Sculptra and Restylane Skin Booster to help consumers achieve healthier-looking skin. In Thailand, an immersive in-person event was held in February, attracting over 4,500 participants, supported by an omnichannel approach. Healthcare professionals and skin influencers helped amplify the event on social media, generating over 1.7 million engagements across platforms. We also saw outstanding performance from Sculptra in Latin America with significant market share gains and record consumption across markets. This was driven by a robust commercial strategy and leading education. We also continued expanding our market-leading education and services. A standout example again comes from Latin America, where Galderma remains the number one player in injectable aesthetics. At the Brazil International Congress of Dentistry, the leading dental congress in Latin America and the largest in the world with 100,000 dentists attending, Galderma clearly stood out. We hosted a 550 square meter booth with multiple activations throughout the event. In Colombia, we significantly increased local consumption following a well-executed local gain event that engaged nearly 500 healthcare professionals. And on the services side, we launched Aspire in Brazil, the first aesthetics loyalty program for healthcare professionals in that market. A key differentiator in the U.S., Aspire is off to a strong start in Brazil with over 1,500 healthcare professionals registering within just two months. As these examples show, our injectable aesthetics business has solid growth momentum for 2025 and is setting the stage for acceleration from 2026 and onwards. Switching now to dermatological skin care, we're continuing to drive differentiated innovation, bringing new products to market through both geographic and portfolio expansion. For Cetaphil, this includes the launch of Cetaphil Agnefast Rescue Pinball Patches in the U.S., Canada, and the U.K., as well as Cetaphil SPF 40 Everyday Sunscreen Tinted Face Lotion in the U.S. We also continue the global road out of the Cetaphil portfolio. This includes Cetaphil's Gentle Exfoliating Cream and Line in Canada and the U.K., and the Bright Healthy Radiance Line in Brazil. For elastin, we're just launching our newly enhanced restorative skin complex with next-generation TriHex technology in the U.S. This formula includes two groundbreaking additions proven to help visibly restore facial radiance and plumbing by supporting the skin's own regenerative abilities. As Elastin celebrates its 10th anniversary, we continue to advance our leadership in physician-displaced skincare and to innovate further, including in our existing Hero products. The image below on this slide shows volume change for a patient after using Elastin's restorative skin complex with next-generation TriHex technology for 12 weeks. On the right side of the face, you will see it was used there only. This represents a 1.08 cubic centimeter volume improvement. With demonstrated clinic effectiveness, this innovation targets key concerns such as loss of collagen and of elastin. It also helps address the loss of volume as a result of medication-driven weight loss or other factors. With this launch, we're taking regenerative skincare to a total new level while further strengthening the synergies between elastin and our injectable aesthetics portfolio. We continue to support growth in dermatological skincare through focused execution and by leveraging our leading education and training platform. Digital first activations remains key, especially as we rebrand Cetaphil for Gen C consumers. Recent advocacy campaigns have featured healthcare professionals and skinfluencers, including Nara Smith, who joined the campaign for Cetaphil's Restoraderm eczema proline with over 10 million followers and personal experience with eczema, NARA is bringing authenticity and strong reach to this campaign. We continue to take a holistic approach to our portfolio, including opportunities to co-promote Cetaphil Restoraderm with Nemluvio. We also maintain our focus on retail fundamentals, both in-store and online, with e-commerce remaining our fastest-growing channel. Recent highlights include a strong resale presence for Cetaphil in India and continued benefits in the US from our improved Walmart shelving for Cetaphil's face. We're also seeing growing penetration of elastin in healthcare professional offices and early traction for Cetaphil on TikTok shop in Southeast Asia markets. Finally, we continue to leverage Galderma's full portfolio to benefit dermatological skincare. In collaboration with therapeutic dermatology, this includes the global rollout of SCIM, which is Skin Knowledge and Innovation Network, with the first symposium in Korea. It also includes making our Cleanse, Treat, Moisturize, and Protect skincare regimen a central showcase at major congresses. Combining dermatological skincare and therapeutic dermatology, it was a centerpiece at the recent India Dermacon annual congregation, which brought together over 5,500 dermatologists. Now for therapeutic dermatology, focusing on Nimluvio highlights. In the U.S., Nimluvio continues to progress strongly, with a sales ramp-up ahead of expectations. Underpinned by growing underlying demand, we continue to see growth in new patient starts, new prescribers, and weekly pull-through. In terms of weekly market share for paid new patient starts, for periculonodularis, Nimluvia was trending at about 30% on a six-week rolling average from mid-February to end of March, and the PN market is expanding rapidly. For atopic dermatitis, although the Still in the earlier stages of the launch, Nemluvia was trending at 3.4% market share for the month of March. We keep increasing our reach with healthcare professionals through ongoing Salesforce expansion and with consumers with the recent launch of our first direct-to-consumer campaign. This campaign, here shown on the right, emphasizes the science and the patient benefits. It highlights Nemluvio's unique mechanism as the first and the only treatment that blocks interleukin-31 or IL-31 signaling, a key driver of itch, of inflammation, and of skin barrier dysfunction. We also could continue to expand commercial access. Reimbursement discussions are progressing very well with forthcoming enhancements to payer coverage. has now also been launched internationally, starting with Germany and showing a positive experience similar to U.S. across three areas. First, activation has been strong. A skin event brought together 100 dermatologists from eight countries, and we're currently ahead of targets for healthcare professional rates, patient demand, and pharmacy reorder rates. Second, patient and healthcare professional feedback has been very positive. especially regarding the fast itch relief. Engagement has focused on healthcare professionals during this early stage with over 700 speaker events reaching 1,800 healthcare professionals in just six weeks. Finally, we're leveraging the breadth of our broader portfolio as highlighted earlier with Cetaphil Restorer Derm to help address rapid itch resolution. So as we covered, Galderma has achieved a strong start to 2025, both in terms of results as well as the progress made across our leading dermatology platform. I would now like to hand over to Thomas to share more details on our financials.

Thank you, Flemming. It's my pleasure to comment on Galderma's Q1 2025 trading update and outlook, starting with an overview of net sales for the period. As mentioned by Flemming, Galderma had a strong start to the year. Aldoma achieved a record net sales of $1.129 billion for the first quarter, representing year-on-year growth of 8.3% as constant currency. Net sales growth was ahead of expectations, benefiting from focused commercial execution, some favorable phasing and injectable aesthetics, as well as a stronger than anticipated ramp-up of Nimluvio. Growth in the first quarter was broad-based across product categories and geography, and it was primarily driven by strong volume complemented by favorable mix. Looking at injectable aesthetics, net sales were 547 million US dollars, up 9.9% year-on-year at constant currency. This was ahead of expectations due mainly to focused commercial execution globally along with some favorable quarterly phasing for the U.S., as well as an earlier-than-expected Sculptra launch in China. Neuromodulators achieved double-digit growth across geographies, with global net sales of $311 million, up 21.4% as constant currency. Growth in neuromodulators was driven by three things. One, strong execution with continued market share gains in the U.S. and across key markets. Two, the Relfides launch with sales in first European markets and Australia, noting the launch also benefited the growth of fillers and biosimulators. And three, favorable quarterly phasing, especially in the US, which is expected to be rebalanced in the second quarter. Fillers and biosimulators net sales were 236 million, down 2.3% at constant currency. This decreased is also not representative of growth expectations for the rest of the year, as Q1 was against a high comparative base in filler and biostimulators. As a reminder, for the first quarter of 2024, this category grew 18.2% at constant currency, significantly ahead of the 2024 full-year growth of 7%. The comparative base effect impacted US growth for this subcategory, while international markets continued on a strong double-digit growth trajectory. Overall, in fillers and biostimulators, we continue to gain share both in the US and across key international markets. Fillers specifically continue to be impacted by market softness in key countries. along with some temporary impact in the US from the wildfires in Southern California. We continue to see strong performance in Asia Pacific and Latin America. Sculptra remains a key growth driver with continued double-digit growth in international markets, including exceptionally strong demand in Latin America, Europe, and first sales in China in anticipation of the launch. Overall, In Q1, our teams have continued to demonstrate our ability to deliver strong performance in injectable aesthetics globally. As a result, we remain confident in our trajectory for 2025, as well as acceleration towards our midterm guidance. Next, moving to dermatological skincare, net sales for the first quarter of 2025 were $270 million, up 7.8% year-on-year at constant currencies. Both Cetaphil and Elastin continued their strong trajectory globally. Despite some slower consumer demand, the dermatological skincare market remains attractive and continues to grow ahead of the broader skincare market. We had especially strong performance in international markets with notable growth in e-commerce and in Asia. Growth for Cetaphil was particularly strong in China, leveraging the Chinese New Year campaign, and in India, supported by continued investments to strengthen Cetaphil's leadership position. Meanwhile, Cetaphil growth in Latin America was impacted by a high comparative base. As for Alastin, we continue to progress on our international expansion, growing its base and nicely gaining market share. In the US, we successfully navigated an environment of constrained consumer spending, growing both our flagship brands. For Cetaphil, we performed broadly in line with the market, with e-commerce remaining our fastest growing channel. For Alastin, we outperformed the market and continued on our growth trajectory as the only top five physician dispensed brand in the U.S. to gain share year-on-year consistently for the past six years. We grew across channels with the core focus remaining on healthcare professionals' engagement and education, benefiting from our integrated pharmacology platform. Overall, we see ourselves on a strong trajectory for continued growth in dermatological skin care. Now, onto a therapeutic dermatology. Net sales for the first quarter 2025 were $212 million, up 4.9% . Growth was driven by the strong ramp-up for Nemluvio, more than offsetting the expected decline of our mature therapeutic derm portfolio. The decline in the mature portfolio, excluding Nemluvio, stems from anticipated lower volumes and generic pressure globally, and especially from the analyzed effect of Horatio's loss of exclusivity in the U.S., which is expected to lapse in the second quarter. It was also our last quarter recording sales for Trinio and Epsilon, with the expected termination a year early of the related agreement between Galderma and Solgel. This does not impact our outlook for the year, as sales contributions from these brands are not material. Our strategy in therapeutic dermatology remains unchanged, with a clear focus on Nemluvio along with lifecycle management of our mature portfolio. Nemluvio, tracking ahead of expectations, achieved 39 million in sales for the period. This includes a strong initial uptake in both prurigo nodularis and atopic dermatitis in the US, as well as initial international sales from its launch in Germany. Nemluvio is on a strong launch trajectory, and set therapeutic dermatology up for significant growth going forward. Now looking at net sales geographically, growth continues to be driven by Galderma's larger reporting geography, international. Starting with international markets, we saw continued growth momentum with double-digit performance. Growth was strong in injectable aesthetics with double-digit growth across both neuromodulators as well as fillers and biostimulators. Growth was also strong in dermatological skincare driven by Asia, more than offsetting Latin America, which was impacted by a high comparative base. In therapeutic dermatology, Nemluvio recorded its first sales while the mature portfolio was impacted by anticipated competitive pressures. Gaderma's overall performance was strong across international markets with double-digit growth led by Canada, China, Germany, India, and the UK, which remained highly attractive and largely under-penetrated. Now, onto the U.S. As anticipated, the U.S. returned to growth, driven by the strong uptake of nemluvio in atopic dermatitis and prurigo nodularis, as well as growth in injectable aesthetics and in dermatological skin care. In injectable aesthetics, Galderma continued to gain share in neuromodulators, as well as in fillers and biostimulators. As mentioned earlier, growth was particularly strong in neuromodulators benefiting from favorable 2025 quarterly phasing, while fillers and biosimulators growth was impacted by a high comparative base last year and ongoing market softness in fillers. In dermatological skincare, Galderma grew both of its flagship brands, and in therapeutic dermatology, for the first time, Nemluvio's sales more than offset the anticipated decline in its mature portfolios. As we look at the remainder of 2025, I would like to reiterate that Galdoma's exposure to currently announced U.S. tariffs continues to be manageable and is fully factored into our guidance for the full year. As per the currently announced U.S. tariffs, Galdoma's U.S. portfolio is mostly exempt from tariffs, with the only notable exception being the U.S. fillers and biostimulators portfolio, which represents approximately 9% of total Galderma net sales. These are imported from the European Union into the US using transfer pricing, thus exposing only a portion of the in-market net sales prices to tariffs. In the US, injectable aesthetics markets overall, more than 90% of all products sold are being imported, whether from the European Union, the UK, or South Korea. In that context, And given its strong market position, Galderma's focus continues to be on gaining market share. Lastly, our sales over-delivery in the first quarter allows us to increasingly de-risk our full-year guidance. This enhances our ability to absorb some further tariff impacts and some consumer demand-related deterioration. These could include, for example, some potential tariffs on products classified as pharmaceuticals. For reference, this port is produced in the UK compared to the majority of competing neuromodulators that are being imported from either the European Union or South Korea. Nemluvio's final manufacturing step occurs in the US. The semi-finished product produced in Germany is imported into the US at a small fraction of this price using transfer pricing. the mature US therapeutic dermatology portfolio exposure would be very limited. It represents approximately 3% of group sales, is also imported using transfer pricing, and includes different with a USMCA-compliant production in Canada. Overall, we remain confident in our ability to manage the impact of tariffs on our business. Following a strong start to the year, we are firmly committed confirming our guidance for 2025. We continue to expect net sales growth of 10 to 12% of constant currency and a core EBITDA margin of approximately 23% of constant currency. As just mentioned, the recently announced US tariffs are fully factored into the guidance. In terms of our additional modeling metrics, they remain unchanged. As a note, Our recently placed inaugural Euro bond and the new dual-trans Swiss franc bonds announced last month do not impact our expected net financial expenses for the year. Overall, we are confident in our trajectory for 2025. I would now like to take a moment on this slide to show the expected phasing of net sales growth for the year. It now reflects that the first quarter came in higher than previously expected, especially in injectable aesthetics. which will have some impact on the growth rate we expect for Q2, especially in neuromodulators. Overall, let me highlight that we clearly expect further growth acceleration as of the second quarter. We remain confident in our three key growth drivers for 2025. Number one, new launches of disruptive innovation, in particular the ramp-up of Nimluvio and Ralphides. Number two, continued strong growth momentum in internationals. supported by further geographic and portfolio expansion in under-penetrated and fast-growing markets. And number three, DUS. Well, we have modest growth expectations, excluding Nemluvio, factoring in a volatile market environment. This concludes the introductory remarks of Galdama's trading update for the first quarter of 2025. Before we close the meeting with Flemming's final remarks, I would like to now hand back to the operator to open the call for questions. In the interest of allowing sufficient time for all analysts to ask questions, I would kindly remind everyone to please limit yourself to one question each. Operator, can you please open the line?