Galderma Group Ag

Good day and thank you for standing by. Welcome to Galderma's conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session with financial analysts. To ask a question during the session, analysts connected on the teleconference call will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Emil Ivanov, Head of Strategy, Investor Relations and ESG to introduce the call. Emil, please go ahead.

Thank you, Sarah. Welcome to Goderma's Half Year 2026 Financial Results Call. The press release along with Goderma's financial statements were published at 7 a.m. Central European Summer Time today and can be consulted on our corporate websites at any time. Today's presentation slides as well as a 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 will be treated with appropriate level of caution as detailed on the slides. Let me now introduce today's half-year 2026 financial results webcast. Dr. Flemming Ornskov, CEO of Doderma and Luigi La Corte CFO, will provide a performance update and discuss the financial results and outlook for the full year. After the presentation, Flemming and Luigi will be available to answer questions from financial analysts before Flemming provides his final remarks to close the webcast. With this, I'd like to invite Flemming to start the Goldermas highlights for the first half of 2026. Flemming, over to you.

Thank you, Emil. Good morning, good afternoon, and welcome to Goldermas first half 2026. Financial Results Webcast. I'm pleased to be here today to discuss Gilderma's continued strong growth trajectory. Capitalizing on another year of opportunities, we're progressing on our ambition to become the undisputed dermatology powerhouse. I would like to thank our teams around the world for their dedication, hard work, and relentless commitment to strengthening our leadership in dermatology and continuing to outperform the market. Galderma is on a highly attractive growth journey. And as many of you know, we were recently selected for inclusion in the Swiss market index. Expected to become effective in September, the inclusion in Switzerland's leading blue chip equity index marks another important milestone in our journey as a publicly listed company. For the first half of the year, Galderma delivered record net sales, surpassing three billion US dollars for the first time in the first six months of the year. Net sales year on year growth was 24.6% at constant currency with double digit growth across all product categories and geographies. With a core EBITDA margin of 25.6%, margin expansion was ahead of initial expectations. Core EPS growth was also significant, up 68.5% year on year. We are raising our net sales guidance for the full year based on this stronger than anticipated trajectory especially in dermatological skin care, therapeutic dermatology, and newer modulators. We now expect 19 to 21% net sales growth year on year at constant currency. We are also confirming our core EBITDA margin guidance for the full year of approximately 26% at constant currency with the intent to continue investing behind growth opportunities and the second half of the year. Let's now look at our net sales performance in more detail. For the first half of 2026, Del Dorma delivered 3.1 billion US dollars in net sales. Growth was predominantly volume driven, complimented by favorable mix effects. Despite a competitive market environment, the business delivered a positive price contribution during the period Excluding the anticipated growth to net impact from Nibiru. Growth was broad-based with all our top 10 markets growing, of which nine grew double digits. Our market performance and outperformance continues to be driven by commercial excellence, innovation, and deeper penetration across global markets. International, our larger reporting geography, grew 19% at constant currency with double-digit growth in each product category. Our momentum remains strong in highly attractive and largely under-penetrated markets. The US, up 32.3% at constant currency, delivered net sales growth across all product categories. This growth momentum was particularly strong in injectable aesthetics and therapeutic dermatology, driven by Nimluvia. With that, let's turn to the performance and key highlights of each of our product categories. In injectable aesthetics, with net sales of 1.4 billion US dollars, up 12.1% at constant currency, we continue to outpace the market across geographies in both neuromodulators and in fillers and biostimulators. The U.S. phasing effect favorable in the first quarter unwound in the second quarter. Neuromodulators deliver net sales of 826 million U.S. dollars, up 13.4% at constant currency. U.S. shipment phasing specific to the second quarter is expected to benefit the third quarter of the year. Fillers and biostimulators achieved net sales of 611 million U.S. dollars representing growth of 10.5% year-on-year at cost and currency despite continued softness in the fillers market. Sculptra, meanwhile, continued to grow double digits in both international markets and in and the US. Executing on our new modulator portfolio strategy, we continue to gain market share in both the US and international markets. Dysport continue to grow in the US and in all top international markets with particularly strong performance across Asia and Latin America. Local investments in healthcare professional engagement and education continue to drive market share gains with outstanding performance in the second quarter in China and in South Korea. In addition, in Europe, including markets where Ralphie Des has already launched, this part sustained double-digit growth. Meanwhile, Ralphie Des continues to build momentum in international markets for which healthcare professional feedback continues to be very supportive. The second quarter saw launches in three additional markets, including in Hong Kong, our first Asian markets. We continue to advance regulatory reviews as we steadily build the broadest and most innovative portfolio in injectable aesthetics supported by one of the industry's most extensive global commercial and educational footprints. Our strategic ambition is crystal clear to become the global leader in injectable aesthetics. Neuromodulators are an important part of that strategy. Over the past several years, we have invested significantly in both R&D and in manufacturing capabilities in this area. Rafides is an internally discovered and developed innovation and is already approved in 33 markets with additional regulatory filings underway. As announced on July the 1st, Galderma received a complete response letter from the US FDA addressing remaining observations on our manufacturing side and on analytical method organization and optimization. This is not uncommon for complex biologics and manufacturing facilities in this space. Approval timelines in the US for newer modulators have generally become longer over recent years. Since 2018, Every new botulinum toxin product reviewed by the FDA has received at least one complete response letter, be it newcomers or the industry's most experienced players. I want to reiterate that these observations do not relate to the safety or the efficacy of the product. Looking ahead, we remain fully committed to resolving these topics promptly and to continue working constructively with the FDA. Advancing Rela Botulinum Toxin A in the U.S. remains a top priority for us. Meanwhile, we continue to drive strong growth and market share gains with Dysport in the U.S. We're excited to be pioneering the next generation of newer modulation. We remain confident in the underlying science and the long-term strategic importance of Ralphides to our injectable aesthetics portfolio. In light of our strong momentum from neuromodulators in both international markets and in the US, we do not expect the US complete response letter to impact our ability to deliver on our midterm guidance as updated earlier in March. In fillers and biostimulators, we continue to advance our portfolio and geographic expansion Supporting ongoing market share gains in international markets and in the U.S. First, we keep scaling recent launches. This includes sculpture in China, which continues to significantly outpace a fast-growing market. For Restylane, this includes investments in education and training to drive further adoption. For example, behind new indications in the U.S. for the chin and for temples. Second, we keep rolling out new technologies in our fillers portfolio. This includes the further expansion of our Restylane Skin Booster SmartClick syringe, now launched in China, and the third approval for Restylane Shape, now approved in Thailand, for chin augmentation. We keep expanding our biostimulators portfolio in new markets. This includes launching Sculptra in Indonesia, approval to launch in India later this quarter, as well as a further approval for body indications in Australia. Beyond our global leadership position with Sculptra, we keep investing in innovation and have made progress with two clinical stage biostimulator assets for our long-term growth. We keep advancing Our clinical development programs while also exploring external opportunities to further extend our leadership in aesthetics. Moving to dermatological skin care, we maintained our strong growth momentum across our flagship brands, Cetaphil and Elast. with net sales of 848 million U.S. dollars, up 16.4% a constant currency, we significantly outpaced the market. As anticipated, growth in the first house was strong, benefiting from a lower comparable base in the period. We continue to grow in both the U.S. and international markets with double-digit growth for Cedarville in fast-growing international markets and for Alastin, in both geographies. E-commerce remains the fastest growing channel supported by our digital first execution. We are also capturing growth opportunities globally through focused execution, through innovation and through portfolio synergies. Our momentum remains particularly strong in fast growing international markets, especially in Asia. On this slide, we're showcasing Cetaphil in China as it continues to deliver outstanding growth. We had the largest online share gains for the beginning of the year among top dermatological skincare brands. We also capitalized on local shopping events to outperform the market online. In the second quarter, this included a highly successful 618 campaign with a particular focus on expanding our presence in the face segment where we have historically been under-penetrated. We also continue to scale our innovations globally, extending their reach and impact across markets. In the US, this includes Cetaphil Skin Activator, one of the two largest US launches in the hand and body segment among dermatological skincare brands. Elastin, which continues to outperform the physician dispense market, including the strong uptake of its two recent launches with TriHex technology plus new great technology. In international markets, among many, these include Cetaphil Baby in India, where we are building leadership in the premium baby care segment, driving significant growth. Elastin also continues its international expansion, which now includes launches in Japan and in Taiwan. Elastin is a great example of a strategic bolt-on M&A. We'll continue to build on that success while also exploring other potential external opportunities. Moving now to therapeutic dermatology, net sales were 848 million US dollars, up 67.9% at constant currency. Growth remained very strong, driven by the ramp up of Nemluvio, which continues on its successful global launch trajectory. Nemluvio net sales for the first half of the year were 433 million US dollars, For the first time, Nemluvio contributed more than half of Therapeutic Dermatology's net sales overall. The US continues to represent the vast majority of sales, which we'll discuss shortly. In international markets, the launch trajectory continues to be even stronger. At the same time, regulatory reviews and approvals for Nemluvio continue to progress, including recent approval in Brazil for both atopic dermatitis and pericardial nodularis. We've also secured additional reimbursement wins in key international markets that support broader patient access. Performance was complimented by higher than expected growth from the mature therapeutic dermatology portfolio globally, up 10% at constant currency for the period. We saw positive growth from geographic expansion and lifecycle management of molecules with benefits also from delayed generic entries. Nemluvio is on a strong global trajectory for which the U.S. remains our largest opportunity. In the U.S., Nemluvio's market share in paid new patient stock, known as NBRXs, was trending at about 42% in periglinal nodularis and about 9% in atopic dermatitis from mid-June to early July. Underlying demand remains strong. In the second quarter, the majority of U.S. patients initiating treatment continue to be new to biologics across both indications. To support growth, we keep investing behind healthcare professional engagement and supporting efforts for strong reimbursement access. This represents a strong achievement and we look to our internal and external opportunities to further complement our growth trajectory in this segment. In the US, we also launched different epidural acne gel over-the-counter. This milestone represents yet another example of Gilderma's unique integrated dermatology strategy. Here, we leveraged our consumer go-to-market expertise to support this prescription to over-the-counter transition in acne care. Driven by strong science and execution, including support from major retailers, the uptake was stronger than we initially expected. The examples I've highlighted across our three product categories once again demonstrate the breadth of our growth opportunities and the significant potential we have to continue outperforming in our market. With that, I'm pleased to hand over to Luigi who is now fully on board to provide more detail on our financial performance and on our outlook.

Thank you Flemming and good morning, good afternoon everyone. It's a real privilege to have joined Galderma at this exciting time with the company rolling out significant innovation and on a high growth trajectory. and clearly I'm very pleased to have the opportunity today to comment on a strong set of financial results for the first six months of the year and equally strong full year outlook as we continue to make great progress towards our objective of becoming the undisputed dermatology powerhouse. As you can see from our financial scorecard for the first half of 2026, Galderma delivered record performance across the board. both across top line and bottom line with EBITDA and net income growth significantly outpacing revenue and with a strong balance sheet lending leverage at the end of June at 1.2 times EBITDA. Flemming has already covered our strong top line performance in detail. So let me just add that I'm absolutely impressed by the company's consistent ability to drive growth across geographies and product categories. on the back of one of the most exciting and broadest portfolios in the sector. And to do that while continuing to drive margin expansion and achieving a marked improvement in key financial metrics. So looking at our financial results, Galderma delivered significant core EBITDA margin expansion with operating leverage more than upsetting the gross margin impact of product mix, as well as the anticipated gross to net evolution and higher royalty rates on the Mluvio. as it continues a very strong growth trajectory. Core EBITDA was US$802 million, up 42.8%, significantly outpacing net sales growth. Core EBITDA margin expanded to 25.6% of revenue, representing a significant 328 basis point improvement at cost and currency compared to the first half of 2025. This performance slightly exceeded our initial expectations for the period, reflecting strong net sales growth, some phasing in operating expenses, and the benefits of a small one-time tariff refund. Growth was even greater in core net income and core EPS, reflecting both the strong core EBITDA growth and lower financing costs, following successful refinancing executed in the first part of the year. For the first half of 2026, Core Net Income was 547 million US dollars, up 66.3%, and Core EPS was 2.34 US dollars, up 68.5%, with EPS growth also reflecting the slight positive effect of share repurchases. and as shown on slide 17, our strong operating cash flow combined with the strong core EBITDA growth reduced net leverage to 1.2 turns at the end of June 26, down from 1.5 times at the end of 2025, despite increased dividend payment and share repurchases done in the period. Net cash generated by operations was 572 million US dollars driven by strong core EBITDA with some working capital absorption driven by the high growth of the business. This cash generation enabled us to return capital to shareholders while maintaining a disciplined balance sheet. During the first half, we paid dividend totaling 104 million US dollars and we purchased 302 million US dollars of shares as part of the final accelerated book build offering by the E3T-led consortium in Q1. and with that we now have a total of just over 4.7 million shares held in treasury. This all results in a very strong investment grade balance sheet profile which reduces our financial expenses and gives the group optionality allowing us to actively consider inorganic growth opportunities across our three product categories to further complement our very attractive organic growth outlook. Reflecting our strong performance in the first half, as Flemming has anticipated, we are raising our full-year net sales growth guidance for the year. We now expect constant currency net sales growth of 19% to 21% for 2026. We continue to expect to outpace the market in each of our product categories while comparing to a higher base in the second half of 2025. with incremental growth expectations versus the guidance that was provided at the beginning of the year, driven by dermatological skincare, therapeutic dermatology, and neuromodulators. In terms of phasing, we expect neuromodulators growth in the third quarter to be particularly strong, also supported by US phasing benefits from Q2 into Q3. This will offset with an injectable aesthetics franchise somewhat softer growth for fillers and biostimulators in Q3 which we expect in the low single digits in the quarter in a soft fillers market and against a high comparable base following the launch of Sculptra in China last year. You may recall that last year did not follow a typical seasonality pattern with greater net sales in the third quarter higher than in the fourth quarter for this subcategory. We still expect dermatological skincare growth to be lower in the second half, normalizing against the higher comparative base in the previous year. And for mature therapeutic dermatology portfolio, with now generics in the market and new ones expecting to enter, and against a higher comparative base, growth is still expected to be negative in the second half of the year, while Nemluvianet sales are likely to pass the $1 billion mark for the year. In terms of profitability, we're confirming a core EBITDA margin of approximately 26% constant currency for the full year, delivering significant margin expansion versus 2025, while absorbing inflationary headwind and continuing to invest behind the growth opportunities that we have. A reminder that our four-year guidance factors in manageable exposure to announced US tariffs and potential effects from recent related proclamations, along with the ability to absorb potential consumer demand deterioration in the second half of 26, given the volatile political and microeconomic environment. Funding received of the recent complete response letter from the FDA for Relabotolunimic and pending further discussion with FDA on completion of the necessary mediation towards the resubmission, we now plan to communicate an extended midterm guidance, one that goes beyond 27 in the first quarter of next year. As Flemming has already said, we don't expect the US CRL to impact our ability to deliver on our midterm guidance through 2027 as updated already earlier in March. and from my perspective, having seen firsthand the strength of our integrated dermatology strategy and execution and the breadth of our growth momentum, I'm confident in the opportunities ahead in our ability to continue outpacing the market. And finally, just as a reminder, you will find as usual in the appendix, our updated modeling metrics, as well as our foreign exchange exposure. Based on June spot rates, we still expect a positive impact on reported figures with higher uplift on sales than Core EBITDA resulting in a slightly negative impact on reported Core EBITDA margins for the full year.

Thank you Flemming and thank you Luigi for the introductory remarks. We'll proceed with questions and answers from our analysts. When it comes to the brevity of the questions, we'd appreciate it if you keep it to one question each so that we can fit as many of you as possible. With this, I would like to hand it back to Sarah, our operator today, to open the line for questions.

Thank you. If you would like to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. And to withdraw your question, please press star 1 and 1 again. Thank you. Our first question today is from the line of Ben Jackson from Jefferies. Please go ahead.

Great, thank you for the question. I'll start with one and then jump back in the queue. I'm going to start with the margin expectation for the full year, 2026, and also the performance for the first half this year. Obviously, it's a great result on the expansion during that first half, but you did call out that it was ahead of your own expectations. Are you able to give us more colour on how much of this was down to the cost phasing? and then for the proportion which you're indicating that you'll reinvest in the second half of the year, are there any particular focus areas that you see are highest priority for that? Thank you.

Yeah, thanks, Ben. I'll take the first part and then I'll pass on to Luigi. Yeah, we are a very high growth company. You've seen the growth. We deliver 24.6%. We're in very competitive categories. We achieved 25.6% EBITDA in the first half. It's many different things driven by the strong growth of our products, their contribution. We also keep a very tight ship on the cost. But the main thing for me is we have to invest to continue to grow the business. And that's the message you're getting. You're getting no under, and it's a simple message. It's a high growth business, high growth required investment, and that's why we're keeping it stable and that's exactly what we plan to do in the second half.

Thank you, Ben. From my side, really the key driver is the operating leverage, the very strong growth that we saw across the business over the first six months. There was a little bit of phasing on cost and really minor impact from this one-time tariff refund, but it was really the sales growth that drives it. In terms of focus for investments, We really see opportunities across the three areas, and so we'll look to continue driving the growth that we see, both in terms of driving greater penetration, winning share, and continuing to launch and expand the portfolio in new markets. So it's really across the spectrum. Thank you.

Thank you. We'll now take our next question. This is from Victor Flock from BNP Paribas. Please go ahead.

Hi, thanks so much for taking my question. We'll stick to one as well. So maybe one on Memlusio's pipeline. You've just announced plans to submit in the pediatric atopic dermatitis patient population. So maybe can you work us through this opportunity? What makes you excited? Whether you can discuss it with the data that has been reported so far and whether you can confirm if it's captured by your current 4 billion guidance for the product? and finally, just can you confirm whether we should expect the CPU phase two top line by year end? Thank you very much.

Well, the short answer, there's nothing I'm not excited about when I talk about Nemluvio. It was launched at number six. It's now almost at par in its trajectory to do Pixent. I've been involved in five or six blockbusters in my career. I've never seen anything like this. So the team is just phenomenal. Yeah, any blockbuster like that is in the Guidant 4 Plus that we've already given. The most important for me is that we deliver great results in CPU and we'll update you when we are ready to tell you when the data are there. The study is ongoing. We have a smaller indication we're also looking at that's also Thank you very much. Thank you very much. Thank you. We will now take our next question.

This is from Cheyenne Cortadia from Goldman Sachs. Please go ahead.

Hi. Thank you for taking my question. So on your injectable aesthetics midterm guide for 2022-2027 of 10% to 12%, you mentioned it's still in place regardless of the REL-fee delay. So I was wondering if you could provide a bit more color on what could influence where in the range you sit. I know REL-fee at the earliest seems like it won't come in until maybe second half of 2017 if you refile by year end. and you mentioned your current Neuromodulator portfolio is performing better than expected. So is that a suitable offset? Just how should we think about this now? Thank you.

Well, I have to compliment it on a very sophisticated question that was trying to get me to answer when we are planning to file. So the answer is We do not know, okay? We just received the complete response letter. There has been no news since we received that letter. We are working through it. We worked very closely with the FDA, both during the inspection of Uppsala, during the various technical CMC related issues, methodology related issues. I think the team is making excellent progress, as you probably know from all your experience. Once you get a complete response letter you are granted an audition with the FDA where you're basically first in writing and then during the meeting present your mediation plans Once that meeting has taken place sometime in the autumn, we will have a better idea both on are we on track and what would be the timing. I'm very confident. I've seen what the team has done. We started off with a large list of issues. We're dwindling it down to a small list of issues. Of course, there's still issues we need to address, but I'm very confident in the team and I'm very confident in a very productive interaction with the FDA. And I know it's a priority for you, but you can imagine it's also a priority for me to get this product approved in the US.

Thank you. We will now move to our next question. And this is from James Gordon from Barclays. Please go ahead.

Hello, James Gordon from Barclays. Thanks for taking the question. Also on the World Free Desk CRL, you've had a little bit more time to digest it. How does it compare to the first CRL in terms of is it as many things to do or is it more benign? And some people had thought there would be a CMD this year and we now have clarity that it's going to be in Q1. So assuming that is a little bit of a push out, is that because potentially you'd like to have World Free Desk refiled ahead of the CMD and that's why the push out or is the push out for other potential reasons? And would the exact timing of when you get the approval in the U.S. for all of this make a big difference to the new guide anyway in that I assume you would guide all the way up to 2030. So if it was a bit earlier, a bit later, how much of a swing factor would U.S. Royal Plymouth be in the group's overall outlook to 2030?

Yeah, James, thanks a lot for one question with a lot of sub questions. So we'll try to answer that. I think the overarching thing is against regarding the complete response letter. I think you would expect, I would expect, the team is expecting that as you work through the list of issues become smaller. But other than that, I have no other comments on this. We will work with the FDA. We will and have started all the work that is necessary to have a capital markets day when you're in the midst of sorting out an important launch product in the US makes to me very little sense. We know you looked for guidance. We've already stated in the email today that or in the letter today that you will get that along with our outlook for 27. So I think we'll meet that requirement and hopefully by that time we can provide more color to the outlook, the timing, is that the only determining factor for our guidance? Of course not. I think you can look at our performance with DuSport around the world. That speaks for itself. The fact that we have already told you that our guidance from 23 to 27 will remain unaffected by this, I think that speaks to the opportunities we have. The good news about having a portfolio, also a new modulator, is that you can shift a little bit resources between one and the other, and this is a time where you see the benefit of that.

Maybe I'll just add from my side, James, you know, we just, we already at the beginning of this year tightened guidance for the 23-27 period. We just upgraded guidance for the 2026. We reiterated that the TRL will not impact our ability to meet that midterm guidance. So we just think, you know, allowing us the time to work through with the FDA their response in our plan way forward. will give a better basis for having that discussion around the midterm early in the new year.

Thank you. Thank you. We'll now take the next question. This is from Alec Ebeling from UBS. Please go ahead.

Hi, thanks for taking my question. It's on the Nemo net price. So in your guidance, what have you assumed for additional Medicare plan coverage? and if you continue to get access through medical exemption are you less likely to pursue full access with PBMs at a discount? Thank you.

No, let me take that question. It's obvious that we are rather successful with our exemption strategy for Medicare, as you know, that's more important for PN than it is for AD. AD is largely covered by commercial plans. We have 90 plus coverage. We continue to monitor this situation. We have one out of five we have contracted with. We're in discussions with the other ones. But I think it's too early to predict whether we will close further. But we are engaged with all of these relevant players that we are not engaged with today and that we don't have contracts with today. but I think you can see that we've been rather successful with what we have done so far but at some point we probably will have to add to the coverage that we have in Medicare but we'll update you then.

Thank you. We'll now take our next question. This is from Joffrey Bellicci-Meller from Bank of America Securities. Please go ahead.

Good afternoon everyone, thank you very much for taking my question. The question I have is, I would like to understand, or if you could discuss, what are the current trends you are seeing in the neuromodulator market in the US, underlying, i.e. beyond your market share gains. Are you seeing an acceleration in the market, or do you have any data points pointing to a potential acceleration in that market that could be supportive into the rest of the year? And related to that, Luigi, you made some very clear comments I think on the third quarter for both neuromodulators and fillers in both simulators. Should we think that the balance of both would lead to Q3 injectable aesthetics to be in line with the second quarter or maybe slightly above? Thank you very much.

Maybe I'll take the second question. I mean, we try and give some direction, but please accept we won't give such precise. I think we're very confident with the momentum that we see in neuromodulators and very confident that, you know, that strong momentum will continue where precisely we're not going to provide. Do you want to take this?

First of all, I think it's very important to realize that we're one of the few companies with a portfolio in neuromodulators. I think we've shown internationally that we have very strong growth of DuSport, ASLU or Ilusions as the various products are called, despite at the same time launching Ralphie Des. So I think that speaks to the fact that we are clearly winning new accounts, penetrating more and doing a really good job with the portfolio. In the US, I think you've seen a trend break. We are getting stronger and stronger. This is all about market share gains. What are the dynamics in the market? Yeah, we know and we've seen that patients prefer or have a strong preference for neuromodulator treatment. We've also seen that products like Sculptra is high on their preference when they choose the treatment, but we are seeing a stabilization of patients. Fillers also in the U.S. market shifted between Q1 and Q2. And I think that's also driven a bit by what you see with the rapid penetration of GLP-1 usage. So the trends are good. The competition is heating up. It's quite clear that we have some very formidable competitors. But I think we continue to take share and I'm really proud of the team.

Thank you very much.

Thank you. And the next question is from Emily Tedbury from Citi. Please go ahead.

Oh, hi. Thanks for taking the question. I just wanted to ask a big picture question on the strength that we've seen in China. Can you talk to the duration of growth you expect to see there? Is the strength that we've been seeing sort of representative end consumer demand, or is it more sort of ramping up in different distribution channels, which perhaps we might expect to reach some kind of steady state or normalize in due course? Thanks.

Emily, did you want me to say that the growth is eternal or that we every single day are in a positive environment? The growth is driven by a phenomenal performance by a team, particularly in the e-commerce channel. You see all the awards they win. How they're perceiving. Remember, we entered late in China, whether it was with the aesthetics business or the consumer business. We focused on e-commerce execution. And I think what I see is the team continues to do extremely well. There are certain events every year, given a very e-commerce savvy population that also are driving various sales boosts. On the consumer side or on dermatological skincare, I see very strong growth and then we'll soon be also hoping seeing impact of elastin. What we've seen in a very, very competitive aesthetics market is that if you launch something I think when we launched Sculptr, there was five competitions on the market. There's 12 now, maybe it's even 13 since yesterday, who knows? And it shows again that we continue to do extremely well. So I think we have a small imprint when you compare to AbbVie, but we have lots of opportunity both on the consumer side, but not least on the aesthetic side.

Thank you. Thank you. We will now take the next question. This is from Sophia Grafess-Nielsen from JP Morgan. Please go ahead. Good afternoon. Thanks for taking my question. Just on Sculptra and International, are you seeing any competitive impact from the use of polynucleotides ex-US, or are you seeing more complementary use in clinics? Is this an area where Galderma might consider BD given the high growth of this market amongst smaller private players, or are there any other areas of high interest for some of these inorganic opportunities you're talking about? Thanks.

Well, Sophia, I have to compliment you because it's also some observations I'm making myself that polynucleotides are starting to get a place. in the aesthetic armamentarium. It seems to me that is nascent. I speak to a number of doctors that are using polinucleotides. Experience are mostly positive, but it's quite clear that along with skin quality, biostimulation, that they probably will play a role. So we continue to There are multiple players, as you know, and in Asia there are even more players. We continue to watch the market, and like anything that is so attracted by the aesthetics market, there's constantly new innovation, and we, of course, as a leader, have to continue to watch that innovation.

Right. I think, Sofia, from my side, as we've said during the call, certainly priority number one, two, and three is continuing to drive the organic growth opportunities that we see in the business, but we're very much also looking at opportunities to complement that with business development and certainly our balance sheet that gives us the flexibility to do that.

Thanks very much. Thank you. And the next question today is from Harry Sefton from RBC. Please go ahead.

Brilliant, thank you very much for taking the question. So just to your comment that Dysport grew double-digit in markets where Ralph Edessa launched, I just want to get a sense of has Ralph Edessa been entirely additive to growth in those markets, effectively enabling you to gain share with the broader portfolio, or has there been some modest cannibalization that a double-digit growth for Dysport simply shows the strength of those markets?

Of course, I cannot exclude that there is some cannibalization, but with the growth of Dysport and the growth that we have of Ralph Edes, that can only be a minor factor. What we're seeing is, and I've been in the field multiple times, that certain clinics have patients that prefer to try something new. Others are more conservative and either want to stay on Botox or on Dysport. So, it's probably a certain segment of doctors, kind of early adopters, and a certain segment of customers that may be wanting to try a new product. But for us, we're selling a portfolio, so we want to make sure that we grow all of the neuromodulators to the extent possible. But I think some of the market shares that have been achieved in a very fast situation, like in Spain and others, I must say it's also taken share but also by getting new patients into the market.

Brilliant, thank you.

Thank you. We have two more questions remaining. Next question is from Henrietta Boag from Deutsche Bank. Please go ahead. Hi, good afternoon. Yeah, I've got a question on Nemluvio, please. We saw a little uptick in MBRX for AD up to, I think it was 8%, 9% actually. And it'd be good to know a bit about what you think is driving this and maybe how you think this is going to evolve in the remainder of the year.

I think, as you probably have seen when you look over the year, in the first part of the year, there's always a little bit of ups and downs because when you have some coverage of Medicare, but you're also relying on individual patient exemptions, Then before the system kicks in for the next year, that creates a little bit of up and down in the NBRXs. But I would say overall, we see an upward trend. We see we continue to gain share. It's getting more competitive, but I've seen the execution of the teams. I'm very confident that this will continue to tick up. And I think there is a good chance that we could hit a billion this year in sales with Nemluvia in the US alone.

Great, thank you. Thank you. We have one more question. Last question is from Victor Floch from BNP Paribas. Please go ahead.

Yeah, thanks so much for taking the follow-up. Just a quick question on the injectability pipeline. I think you mentioned that you are moving to biostimulator assets to clinical stage. So just wondering whether you can discuss how those products differ from Sculptra, and when should we expect them to hit the market? Thank you very much.

Yeah, we have multiple candidates. I would still characterize them at early stage. Biostimulation and fillers are two categories that we're constantly trying to innovate in, whether it's with new modalities or new ways of injecting and new indications. So yeah, it's quite clear that one of our focus areas of interest is in biostimulation and and those relatively early stage compounds are still in that field and I can assure you once we have data we will publish the data and show you but you know early stage interesting but it's early stage.

Thank you Flemming, thank you everyone for the good questions. Before we close the call I'll hand over to Flemming for his final remarks.

Well thanks a lot Emil and thank you everybody online for your time and of course your questions. I think you realize that 26 is another exciting year of opportunities for Galderma with continued execution of our proven, growth-driven, integrated dermatology strategy. For the first half of the year, we delivered record neck sales. We surpassed 3 billion US dollars for the first time in a six-month period of a year. It was a broad-based growth, double-digit across geographies and across product categories. We achieved significant core EBITDA margin expansion of 328 basis points at constant currency, clearly ahead of expectations. With strong cash generation, we strengthened our financial profile, and I think we clearly demonstrated our commitment to superior shareholder returns, along with, of course, delivering significant growth in core earnings per share. So our confidence in Gilderma's growth trajectory remains very strong, and based on our performance for the first half of the year, We're raising our full year net sales guidance to 19% to 21% at constant currency and we're also confirming full year core EBITDA margin of approximately 26% at constant currency while of course targeting growth reinvestment in the second half. So with these closing remarks I want to thank you for joining our call today. Thank you.

This concludes today's conference call. Thank you for participating and you may now disconnect.