Hypera Sa S/Adr

Good morning, ladies and gentlemen, and welcome to Ipera Pharma's conference call where we will discuss the earnings for the third quarter of 2025. We have with us Mr. Bruno Oliveira, CEO, and Mr. Ramon Sanchez, CFO and Investor Relations Officer. We would like to inform you that this event is being recorded and you may watch a recording of this video on the company's investor relations website, ri.ipera.com.br. We would like to inform you that all participants are in listen-only mode during the company's presentation. After that, we will begin the questions and answers session when further instructions will be given. Before we continue, we would like to highlight that some of the information in this conference call may include projections and statements about future results. This information is subject to known and unknown risks and uncertainties that may make these expectations not come to pass or to substantially differ from what was expected. We will now hand it over to Mr. Breno Oliveira, who will begin the company's presentation. Go ahead, sir. Good morning and welcome to the third quarter 2025 earnings call. We're going to start on slide three. This is the first quarter after concluding the working capital optimization process that was started last year. And results show that this was implemented successfully. There was no impact to sell out. We conserved profitability and we had significant improvement in our operational cash generation. And we've also maintained investments and shareholder remuneration as planned last year. Sellout went up nearly two percentage points above the market and nearly three percentage points above our growth in the second quarter. Our highlights were influenza medication, painkillers, gastric cardiology, skincare, and hydration. This acceleration in sellout and market share gains are a result of the recent initiatives to strengthen our portfolio of leading brands with new launches and more investments in marketing in points of sale and digital media. We've maintained our operational profitability, reaching an EBITDA of nearly $760 million with a 34% margin. This level is similar to what we had before the working capital optimization process, and it is higher than last quarter's. We reduced investments in working capital as a percentage of net revenue to 30%, the lowest in the last few years. This has been led especially by reduction in accounts receivable, which was at 58 days at the end of the quarter. This quarter, we combined sellout growth, profitability, and strong operational cash generation, sustaining shareholder payouts, and strengthening our corporate governance and i'll go into details about that on slide four we approved payments of 185 million and we've updated the committees in the company to strengthen the governance and the technical competence of these committees ramon will continue with more details about this quarter's results Thank you, Bruno. Good morning, everyone. We will begin on slide five. Our net revenue went up 16% to 2.2 billion, a result of the combination between sell-out growth in retail and a reduction of 4% in the institutional market. This reflects a lower level of sales to the public market. And this improved our performance due to the optimization process concluded in the last quarter. And it was started in the third quarter of 2024. As I mentioned in the last call, Our expectation is to combine sustainable growth of sellout with maintaining operational profitability and thus conserving our margins. Gross margins were 61.2%, slightly higher than the second quarter of 2025 and the third quarter of 2025. And this was benefited by a mix in products sold that was not impacted by the working capital optimization strategy. marketing expenses came to a total of 367 million the same level as the last three quarters and it was mostly more directed to digital media selling expenses were five percent lower than what was posted in the third quarter of 2024 showing a reduction in r d expenses which had a positive impact by the led bank benefits and also some synergies from the sales structure reorganization carried out in the first quarter. General and administrative expenses went down to 85 million as a result of better efficiency in expenses with teams. Therefore, our EBITDA margin from continuing operations reached 34%, converted into cash flow this quarter, as I'll mention in the next slide. We also reduced investments in working capital, representing 30% of our net debt at the end of the third quarter. Last year, we had been investing half of our net debt into working capital. This reduction has led us to the lowest historical level of operational cash, with a growth of 16% versus the third quarter of 2024. We invested in CapEx, the scopolamine extraction plant that's the raw material behind the buscopan brand and the eta pacifica plant which will produce the products acquired from takeda intangibles or 55 million this is mainly innovation research and development we also concluded the 20th debenture issuance with a term of five years and the lowest historical spread, CDI plus 0.75%. This issuance is being used to pay the higher spread issuances, allowing us to extend the average term of our debt. With that, the company's total cash generation 630 million, which reduced our net debt to 7.3, or 2.4 times our annualized EBITDA for the quarter. Now we will hand it over to Bruno for his closing remarks. Thank you, Ramon. What we saw this quarter was a good summary of our long-term strategy. growth with profitability and strong operational cash generation. We accelerated our retail sellout, growing nearly two points above the current market, and we increased our investments in leading brands without compromising our profitability. We also reached the highest operational cash flow in our history. We have many opportunities to grow sustainably on the short and medium term, extending our leading brands and launching products in new markets, including those that will no longer be exclusive, such as semaglutide. Our pipeline for the next years has several products across all of our business categories. They are selected carefully in order to maximize value generation for our shareholders. We are the only company that has a leading position across all segments in the pharmaceutical industry. And with our leading brands and our innovation pipeline, we are well positioned to capture growth opportunities in the medium and long terms. Thank you, and we will now continue with the questions and answer session. We will now begin the questions and answer session for investors and analysts. If you would like to ask a question, please click on the raise hand button or the react button. If your question has been answered, you may take yourself out of the queue by lowering your hand. The first question will be asked by Mauricio Cepeda from Morgan Stanley.

Go ahead, sir. Thank you.

Good morning. Thank you for taking my question. We have a few questions about the future. Semaglutide is nearly having its patent expired, and I know that this will be an important moment for you as a competitor in the generics market. So I'd just like to ask a few things about how competitive you believe this market will be. We know that Envisa gave some registration priority to local production, and you were licensed for that.