Galderma Group Ag U/Adr

Thank you, operator. Warm welcome to GoDerma's full year 2025 financial results webcast. The press release along with GoDerma's 2025 annual reports were published today at 7 a.m. Central European Standard Time and can be consulted on our corporate website at any time. Today's presentation slides as well as a recording of this 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 detailed on this slide. Let me now introduce today's full-year financial results webcast. Dr. Fleming-Ortkov, the CEO of Goderma, and Thomas Dietrich, CFO, will provide a performance update and discuss the financial results for the full year, followed by the outlook for both 26 and the midterm. After the presentation, both Fleming 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'd like to invite Flemming to start with Golderma's highlights for 2025. Flemming, over to you.

Thank you, Emil. Good morning, good afternoon, and welcome to Golderma's full year 2025 financial results webcast. It's an honor to be here today and to confirm yet another record performance for the companies. 2025 was a year of opportunities, and thanks to our team's hard work, we made important progress towards our ambition of becoming the undisputed dermatology powerhouse. We now have a robust foundation to continue driving very attractive top and bottom line growth in 2026. Our journey as a dermatology category leader did not start in 2025, but six years ago with a transformation guided by our growth-focused integrated dermatology strategy. In 2020, we started our first year as a standalone company owned by private equity. It was during that time that we set a strong foundation for the business. We refocused our execution, centered around dermatologists, and we fixed commercial fundamentals. We strengthened the portfolio and built a leading pipeline across our product categories. We established our integrated dermatology platform, including optimizing our distribution channels and vendors. And in a tightly managed environment, we also learned that we had to be focused to succeed. This is now embedded in our culture, especially in our commercial execution. It is one of Gilderma's strengths to be able to focus on a select number of key priorities and deliver them consistently. In 2024, we reset our capital structure as a newly listed company on the sixth Swiss exchange. Over the following two years, we emerged as the dermatology category, With our focused commercial execution, we reignited broad-based growth across our three product categories, outperforming each market respectively. We expanded the portfolio and fueled our growth momentum with differentiated innovation, including two launches with blockbuster potential. Lastly, we strengthened our scale commercially, by further penetrating key growth markets and operationally by expanding our in-house manufacturing. Capacity has been significantly increased at our manufacturing sites. This includes completing the build out of our biologic sites in Uppsala, alongside our announcement to further invest in the US through contract manufacturing partners. For 2026 and the years ahead, we're set to advance on our growth journey. With our transformation now largely complete, we also enter this phase with a diversified long-term shareholder base. As part of this, we welcome L'Oreal's increased ownership now at 20% following the successful close of the previously announced transaction. In this phase, our priorities are clear. Execute as leaders in each of our product categories, Continue to invest in sustainable growth by rolling out differentiated innovation, progressing our pipeline, and exploring inorganic opportunities. Further scale our footprint and penetration of attractive markets, maximizing opportunities in the U.S. and in international markets. It's an exciting time at Gildermas. I'm grateful to enter this next stage of growth with our talented teams around the world, without whom none of this would have been possible. Looking closely at 2025, there were many highlights beyond our record performance. Let me share a few across the three pillars of our integrated dermatology strategy. Starting with our broad and innovative portfolio, we had launches across nearly all of our key brands, including some exciting differentiated products, as well as expansion of our geographic reach. We also progressed and invested in our broad innovation pipeline. This includes attractive early-stage assets with promising commercial potential. In injectable aesthetics, This included key submissions and approvals from the broadest clinical trial pipeline in the industry. In dermatological skin care, product introductions with breakthrough benefits in both our facts and facts. And in therapeutic dermatology, new approvals as well as the initiation of two clinical trials to explore new potential indications for nemolysis. Next, looking at our global scale, All of our top 10 markets grew in 2025, with eight delivering double-digit growth. We continue to expand our commercial operations to enhance our reach across all channels. We now have a sales force of over 2,500 globally, as we continue to invest in many of our top markets. In dermatological skincare, our digital playbook continues to deliver with e-commerce being our fastest growing channel with over 25% year-on-year net sales growth. Our digital first execution with Cetaphil also continues to reach billions of consumers globally. We'll discuss several examples of that later in the presentation. Last, but of course not least, looking at our market leading education and services. Our increased engagement reached over 290,000 healthcare professionals in 2025 through education, training, and medical awareness activities. This included a prominent presence at key medical congresses and numerous proprietary educational events, including over 10,000 events with GAIM, our Galderma Aesthetic Injector Network, ASPIRE, Our aesthetics loyalty program expanded into Brazil, one of our top aesthetics markets. In the U.S., its membership grew double-digit in the year, with now over 4.8 million consumers. Together, these examples demonstrate our leadership in dermatology and the strategic drivers behind our market share grains across all product categories. Moving to our financial highlights, capitalizing on a year of opportunities, Galderma continued on a strong growth trajectory on both net sales and profitability. Galderma delivered record net sales, surpassing $5 billion in a year for the first time. Net sales year-on-year growth was 17.7% in constant currency, with broad-based growth across geographies and product categories. Delgerma delivered core EBITDA of 1.2 billion US dollars with a margin of 23.3%. This represents a year-on-year margin expansion at constant currency, which exceeded initial expectations in a year of major launches and reinvestment in our growth. Core EPS grew to 3.69 US dollars, up 76.7% year-on-year, driven by strong core EBITDA growth reduce financing and tax expenses, as well as share repurchases. We expect another year of strong opportunities in 2026 with very attractive double-digit growth and significant expansion of profitability. We are guiding to net sales growth of 17 to 20% at constant current with our proven integrated dermatology strategy growth will continue to be driven by a continued focus on execution, innovation with a ramp up of key launches and further geographic penetration. So guiding to a core EBITDA margin of approximately 26% at constant currency. This represents a significant margin expansion in another year of launches and growth investments. Overall, we're confident in Galderma's trajectory and our ability to outpace the market despite intensifying competition and a volatile external environment. As a result, we are specifying our mid-term guidance within and above the previously stated ranges. More from that later. Now, let's turn to our performance update, including key highlights by product category. For the full year, Gilderma delivered 5.2 billion U.S. dollars. Net sales year-on-year growth for the full year was 17.7% and constant growth was widespread with double-digit growth in both geographies. We also outpaced the market in each of our categories where products we have. In the fourth quarter, net sales growth accelerated to 25.2% year-on-year at constant currency with growth accelerating across all product categories. Net sales growth overall was predominantly volume-driven, with a favorable product mix offsetting pricing effects from the competitive environment. In injectable aesthetics, we remain on our strong growth trajectory, consistently outpacing the market across geographies and across subcategories. Net sales growth continued to be driven by focused execution, new product launches, and further geographic penetration. Net sales for the full year were $2.572 billion, up 11.5% year-on-year at constant currency. For newer modulators, net sales were $1.471 billion, up 14.3% year-on-year at constant currency. Both geographies delivered double-digit net sales growth and continued to gain market share. DoSport continued to outperform globally with strong growth in key markets. Ralphie Des enjoyed a strong year of launches, setting a high growth base for 2026. And our strong fourth quarter performance in newer modulators, notably in key international markets, more than offset growth. the facing benefits experienced in the third quarter. For fillers and bio-stimulators, net sales were 1.101 billion US dollars, up 8% year-on-year at constant currency. Both geographies continued to gain market share. Fillers continued to be impacted by market softness and pricing pressure globally. This was a result of lower consumer demand and aggressive promotional activity from competitors especially in the mid-stage. We continue to focus on our more differentiated offering with net sales growth, especially driven by the uptake of new launches, led by Restylane Shape in Brazil and by our medication-driven weight loss activation. In biostimulators, Sculptra accelerated its double-digit growth, remaining our fastest-growing injectable aesthetic spread. Net sales growth was particularly high in key international markets, especially in China, where we had an exceptionally strong first year of loss. We're excited for the future of neuromodulators as we reflect on our first full year with RalphieDesk. Widely recognized for its superior profile, it is shaping the future of neuromodulation. It is gaining share helping us further penetrate existing accounts and also win new accounts where we can also leverage Galderma's full portfolio. It has also strengthened our confidence in our new modulator portfolio strategy with this board continuing to grow in markets where RalphieDesk was launched. Recent in-market surveys and our advisory board confirmed that RalphieDesk is perceived by both healthcare professionals and patients as benefiting from high satisfaction overall, rapid onset, long duration of action, and ease of use. This is reflected in the very positive uptake in market so far. While, of course, the ramp up will be progressive, which is typically in this space, the trajectory is strong. Rapidus has already surpassed Ellucian in terms of sales, which was launched three years earlier. While there's always a lack in injectable aesthetics data, the third quarter of the year suggests that Ralphie Des is already at least a top five brand in neuromodulator sales across European markets where launched. Looking at the third quarter data for the first two markets where we launched, which was Spain and Germany, we held double-digit market share and were already ranked third after Dysport and Bultus. Meanwhile, We're also progressing with our global expansion plans. Rafid S is now approved in 23 international markets. This includes recent approvals in additional markets. We expect multiple more approvals to follow in 26. We have launches underway this month in multiple countries, including New Zealand. We were also in the progress of launching in the United Arab Emirates. But given the situation, our focus has now shifted the safety, and the well-being of our colleagues and customers. On February 2nd, we also announced that the U.S. FDA accepted our resubmission for Ralphie Death's BLA. With Ralphie Death, we're excited to be pioneering the next generation of neuromodulation and strengthening our leadership in injectable aesthetics. In fillers and bio-stimulators, we are also making progress in preparing the next phase of growth. We continue to invest in our fillers portfolio, which is already the broadest on the market with innovative launches and demand generation activities. In the US, we received the approval of the chin indication for Restylane Lift. This strengthens one of our top-selling Restylane products. In Japan, we saw the approval of Restylane Define and Refine, a first step in expanding our currently limited portfolio in a major aesthetics market. We also unveiled our new Restylane campaign, which aims to support healthcare professionals in advocating for the segment with patients, reinforcing fillers as an integral part of their aesthetic journey. Wake Up to Restylane reframes Restylane from a clinical procedure into an always-on natural beauty regimen backed by science. In biostimulators, we continue to strengthen our leading position and expansion in regenerative aesthetics. The launch of Sculptra in China was very strong in 2025. Sculptra is rapidly gaining market share and expanding its reach with over 30,000 healthcare professionals already trained. In addition, a new chapter opened for the brand as we expanded our Sculptra label in Europe to include four new body indications. while perhaps a more niche segment than the face, the volumes injected to treat body indications are often significant. We're also shaping the aesthetic journey for patients undergoing medication-driven weight loss with leading education and training around our proven portfolio. Not only did we run and publish the first of its kind clinical trial with Restylane and Sculpta, we published the first international consensus guideline for GLP-1 patients. In the U.S., we saw results from our focus direct-to-consumer campaign to generate new demand for healthcare professionals. It has had promising initial uptake, leading to a high conversion of new patients starting on our portfolio. We also announced a new focus for 26 onwards around the aesthetic needs of perimenopausal patients. This is a historically underserved population with high unmet needs, and it's growing quickly, expected to impact 1.2 billion women by 2030. There's an opportunity to serve these women with fillers and biostimulators, the most frequently considered treatment to address the strategic concerns related to menopause. DELDERMA is very well positioned to capture this opportunity. Moving forward, Menopausal status is being incorporated into all of our clinical trials. As you can see, there are a lot of drivers underpinning our recent net sales acceleration in fillers and biostimulators, giving us confidence for the future. Moving to dermatological skincare, both Cetaphil and Elastin continued on their strong growth trajectories, outpacing their respective segments globally. Net sales for the full year were 1.449 billion U.S. dollars, up 9.3% year-on-year at constant currency. Growth was very strong in international markets, with Cetaphil gaining share and delivering exceptional performance in Asia. China and India continued to deliver outstanding net sales growth, with particularly strong net sales from year-end activations. In international markets, Elastin continued to ramp up. In the U.S., growth was driven by elastin, growing double digits. Cetaphil in a year of constrained consumer demand had a strong fourth quarter from the uptake of recent launches and year-end activation. Dermatological skincare net sales growth continues to be driven by holistic execution and targeted innovation while leveraging synergies from Galderma's full portfolio. E-commerce remains the fastest growing channel where we see strong results from Cetaphil's digital-first approach. Cetaville is indeed gaining growth momentum. We saw strong results from our digital-first global activations to support engagement and growth. Earlier in 2025, we launched Cetaspare, now one of the world's largest skincare advocacy networks. After six months, it had over 2,100 content creators engaged and over 110 million organic video views. We are proud of the community, which has an engagement rate that is nearly two times higher than the skincare category average. We also launched Derm on Tour, a global tour offering free dermatology consultations. The immersive, science-driven pop-up experience has been hosted already by four U.S. cities with a social media reach of over 100 million views. I would be remiss to not mention China. which had another outstanding performance in the fourth quarter of last year. This included another record-breaking Double 11 season, selling 600,000 units in only 20 seconds, yeah, 20 seconds, in collaboration with the number one Chinese livestream. For the full year, Cetaphil outperformed the skincare market online during the period compared to skincare sales from the top e-commerce platforms and top dermatological skincare brands. It also included a record campaign centered around the second Sotovia movie with over 50 million US dollars in sales in just one week. This strong fourth quarter net sales momentum sets the stage for 2026. I'm happy to share that our China team is already off to a great start with good traction behind Reason Chinese New Year activities. In dermatological skin care, we have many expansion opportunities ahead. With Cetaphil, we've successfully launched differentiated innovation. This includes a number of new products launched first in the U.S. with the opportunity to now expand an international market. This included the international rollout of Cetaphil's bright, healthy reagents and gentle exfoliating lines. Looking ahead, we're excited about rolling out Cetaphil Skin Activator hydrating and firming line and the nourishing oil to foam cleanser. Both deliver breakthrough benefits and created entirely new categories with strong results in the U.S. so far. Looking at the skin activator specifically, it is the number two new product innovation in the U.S. hand and body lotion segment across dermatological skincare brands following its launch in September 2025. Elastin has expansion opportunities globally with its continued rollout in international markets and further penetration in the U.S. where it is performing very strongly. In 2025, Elastin went up one position in the U.S. and is now ranked number four in sales among physician-dispensed health skincare brands. It continues to be the fastest growing of the top five physician-dispensed skincare brands in the U.S. and the only one growing double digits in sales last year. With its physician-first approach, Elastin is strengthening its leading position as the preferred period procedure skincare brand. The launch performance has also been very strong for elastin restorative skin complex featuring our next generation Tyhex technology. This formula is proven to support the skin's own regenerative abilities, which pairs very well with our injectable aesthetics. Here again, there are many reasons to be excited for accelerated momentum in dermatological skin. Moving to therapeutic dermatology, growth was very strong, driven by an outstanding launch trajectory from Numluvio in Pruello nodularis and atopic dermatitis. This growth more than upset the anticipated decline in the category's mature portfolio, especially in the U.S. Net sales for therapeutic dermatology were $1.185 billion U.S. dollars, up 50.2% year-on-year at constant currency. For the year, Nemluvio contributed 452 million U.S. dollars in net sales. The vast majority of the Nemluvio sales were recorded in the U.S., which we'll discuss further shortly. Overall, for the full year, Nemluvio sales were split almost evenly between periclonodularis and atopic dermatitis, with a share of the latter increasing quickly. While international sales are only a small portion of total and annual sales, the launch trajectory has been even stronger there. In Germany, the first international markets where we launched, we gained even greater market share in total prescriptions than in the U.S. Meanwhile, the launch in other markets looks very promising. This includes the U.K., where our teams have done an excellent job securing access to formularies and are significantly outperforming sales forecasts. In the U.S., which is our largest opportunity for Nimluvio, the launch trajectory has been outstanding. Its significant market share gains are underpinned by its differentiated profile, as well as by our team's effort to expand the sales force, deliver market-leading education, and enhance market access. In the U.S., Nimluvio's market share in paid new patient starts, also known as NBRXs, was trending at about 35% in periglinal large and about 8% in atopic dermatitis from the end of December 25 to the end of January of this year. Across both indications, the majority of U.S. patients initiated treatment continue to be new to biologics. Yes, new to biologics. Galderma has broad access in commercial plans for Namluvia in the U.S. as a first-line biologic treatment. which has been further increased by approximately 85% current. We also secured our first major access win in Medicare as of January, 2026. One of the four major Medicare payers have now granted Nemluvio first line formulary access and we're engaging with the others to broaden coverage. As mentioned, the real world experience for Nemluvio has been greater than initially expected. While itch relief remains the main reason to prescribe Nimluvio, physician experience with the product also provides conviction on skin clearance. On this slide, you can see the results of our latest survey with healthcare professionals in the US on the brand attributes for moderate to severe atopic dermatitis. The attributes are ordered by importance and rated by prescribers, with the results split In two on the slide, on the left are prescribers with low or limited experience with nemluvio, and on the right are adopters with greater experience with nemluvio. The most important first attributes are itch-related. And nemluvio, in dark purple, is perceived ahead of the leading brand among all prescribers. This is perhaps not surprising, giving nemluvio a strong clinical differentiation and recognition as the therapy of choice for itch. In the remaining two attributes, Nemluvio adopters perceive its superior benefits. The difference is particularly important when looking at skin clearance, where Nemluvio moves from being perceived significantly worse than the leading brand to being perceived as better than the competitor based on real-world experience. We're confident in Nemluvio and the meaningful impact it can have on patients' It drives our teams to improve our reach and gain buy-in from more and more prescribers. This is what also drives our conviction in the raised peak sales potential of the treatment, which we will discuss later in the presentation. Looking at our geographies, net sales for both international markets and the U.S. grew double digits in the year. Growth was broad-based, with all of our top 10 markets growing. our larger reporting geography, sustained its strong net sales growth momentum in highly attractive, largely unpenetrated markets. Overall, in international markets, Ejacubal statics delivered double-digit net sales growth and outpaced the market in both neuromodulators and fillers and biostimulators. Despite a soft filler market, each brand delivered growth with market share gains in most key markets. Dermatologist SkinCab also delivered double-digit net sales growth with particularly outstanding growth in India and China. Their periodic dermatology net sales growth was mainly driven by Nemluvio with strong launch trajectories in its first European markets, while the mature portfolio delivered modest growth. The U.S. delivered net sales growth in each product category and was especially strong for neuromodulators and therapeutic dermatology, thanks to Nemluvia. Injectable aesthetics outgrew a soft market and gained share in both neuromodulators and fillers and biostimulators. Fillers continued to be impacted by market softness, while neuromodulators and biostimulators net sales grew double digits. Dermatological skincare growth was mainly driven by elastin, growing double digits, while Cetaphil had a strong fourth quarter from the ramp-up of recent launches and year-end activations. Therapeutic dermatology had outstanding growth driven by Nemluvio's strong trajectories, which more than offset the anticipated decline in the mature portfolios. As part of our growth journey, we continue to advance our ESG agenda as an integral part of our strategy. In 2025, we revisited our focus areas following a detailed double materiality assessment, the results of which we have shared in our 2025 annual report. We continue to make progress across all the highlighted areas on this page, with particular focus on sustainable products and production and medical education and training, which are closely linked to our strategy. In addition to driving our ESG agenda, we challenged ourselves to enhance our disclosure and have for the first time obtained limited assurance on nine non-financial indicators. Finally, I'm pleased to share that our ESG agenda has gained external recognition through improvements in key ESG ratings, including a AA rating from MSCI in 2025. With these business highlights complete, I would now like to hand over to Thomas to provide more details on Galderma's financial.

Thank you, Flemming. It is my pleasure to comment on Galderma's full year financial results. Here is the financial scorecard for the full year 2025. It shows Galderma delivered record performance across the board. Flemming just presented the top line growth. So let's now look at the rest of the scorecard in some more detail on the next slide. Core EBITDA grew to $1.211 billion, up 18.9% year-on-year at constant currency. Core EBITDA grew ahead of net sales, exceeding initial expectations in a year of major launches and reinvestments to drive growth. The reported core EBITDA margin was 23.3%, representing a margin expansion of 24 basis points at constant currency compared to 2024. This was possible due to ongoing operating leverage as well as a reduced adverse P&L impact from Nemolizumab as a result of its greater sales. Improvements in operating expenses also offset the impact of pricing effects and unfavorable product mix on gross margins. coordinate income grew even more meaningfully to 871 million U.S. dollars, up 75.4% year-on-year. This was driven by strong core EBITDA growth, as well as reduced financing and tax expenses, which I'll cover later on. This translates to core EPS of 3.69 U.S. dollars, up 76.7%, benefiting from the drivers I just mentioned for coordinate income and, on top, The share repurchases were executed in 2025. Here, on the next slide, you see that Galderma's integrated dermatology platform provides operating leverage for the group. This is showcased in the year-on-year improvement in underlying profitability, defined as our core EBITDA margin, excluding the core EBITDA impact from nebulizumab. For 2025, it grew to 28.7% despite a year of significant launches and reinvestment into growth drivers in a competitive environment. Recall, we started showing this evolution a few years ago, given the important investments in Nemulizumab prior to having any sales. Please note, that we no longer plan to disclose this view going forward now that Nimluvio has been in the market for over a year, and given that we expect Nimluvio to break even on a contribution basis later this year. We'll get into this topic a little bit more in a minute. The strong cash generation in the year supported our deleveraging trajectory, as well as shareholder value creation in the form of a dividend and share repurchases. Let's look at the key movements between our cash position beginning of January to end of December 25. On cash generated from operations, Scalderma drove very strong cash generation for the year, driven by significant core EBITDA growth and favorable networking capital movements. Networking capital positions improved significantly behind effective networking capital management, structural improvements driven by shifts in market and product mix, as well as phasing benefits. Looking ahead, while expecting the structural networking capital improvements to stick, we expect other parts to normalize, reflecting our fast growth trajectory. All of this is reflected in our additional modeling metrics which you'll find in the appendix of our press release and appendix of this presentation. On interest and taxes, interest payments were lower in 2025 than the previous year, reflecting the benefits from our deleveraging and refinancing activities. Our tax expenses were also lower, predominantly as a result of a one-time non-cash benefit from recognizing deferred tax assets on past tax losses in Switzerland. On CapEx and milestones, the movements reflected what was shared in our financial results for the first half of 2025. Core CapEx improved, benefiting from phasing of project spend, with some now falling into outer years, as well as continued focus on spend efficiencies and site operating performance. CapEx as a percentage of sales also benefited from the high next sales growth. Meanwhile, The last expected milestone payment for Nemolizumab was paid for a total of $23 million. Finally, in financing cash flow and foreign exchange, our strong cash generation enabled us to repay $240 million of debt early, to repurchase shares for a total of $363 million, and to make a dividend payment of $41 million. Reflecting all the activities we just discussed and our ambitious deleveraging trajectory, I am pleased to report that net leverage came down to 1.5 turns at the end of December. This was driven by very strong cash generation in 2025, as you can see from this slide, while also delivering significant shareholder returns over the period. Let me also highlight the substantial progress we achieved in refinancing our IPO related term loan for a total of 1.26 billion US dollars in 2025. To do so, we issued several bonds benefiting from two investment grade credit ratings, BBB positive by S&P and BBB stable by Fitch. In February 2026, we also successfully refinance our revolving credit facility at more advantageous terms and increase its size to $1 billion. Moving on to capital allocation, our capital allocation priorities remain focused with priority on organic growth. As we strengthen our financial profile, we also increase our strategic optionality. If we look at our key achievements for 2025, First and foremost, we maintained Dalgerma on a strong sales growth trajectory despite an uncertain environment with appropriate investment and focused execution to outpace the market. In terms of business development and licensing, we completed our final milestone payment for Mimolizumab. Given our rapid deleveraging trajectory, we reached our midterm target for net leverage to be below two turns early. Going forward, we will focus on maintaining our solid investment grade rating. And in terms of shareholder returns, in addition to the share repurchases already mentioned, we are proposing a dividend of 0.35 Swiss francs per share, an increase of more than 230% versus the dividend per share paid out last year. Subject to approval at the upcoming annual general meeting, the dividend payout represents approximately 16% of the reported net income for 2025. We have just received the confirmation from the Swiss Federal Tax Authority on the tax treatment of the proposed dividend payment. I am pleased to confirm that the proposed dividend payment in 2026, which is paid out from reserves from capital contributions, will be 100% exempt from Swiss withholding tax. 2025 was a year of outstanding performance with many achievements that all our Galderma colleagues and teams can be proud of. Now, as we look ahead, I would like to invite Fleming to share our attractive outlook for 2026 and the midterms.