Sisram Med Ltd

Good afternoon and good evening. Thank you everyone for joining us today. Welcome to CISRAM Medical's H1 2024 earnings call. This is Xiaotong Li, the analyst from Guangfa Securities. As a reminder, this conference call is being recorded today. Now I'd like to introduce our speakers on the call. With us on the line today are Mr. Leo Dayen, CISRAM Chief Executive Officer, Mr. Duran Yanai, AirMask DFO, Ms. Qianli Fang, Secretary of the Board. Management will begin with an overview of the business development for the H1 2024. And following the prepared remarks, we will hold a Q&A session. With that, I'd like to turn the conference over to Leo Dayen, CISROM's CEO, to share updates for H1 2024. Please go ahead.

Thank you, Yeotong Li. Thank you very much, everybody, for joining us on the call today. I'm happy to provide an update on the ongoing success during the first half of 2024, which has been a period of momentum for CISROM. For over two decades, CISRM has been a global leader in the consumer wellness, built around four core businesses areas, which are energy-based devices, injectables, home-use devices, and also skincare. The medical aesthetic industry is evolving rapidly. Technological advancements and shifting consumer preferences are elevating beauty standards with increasingly sophisticated consumers seeking personalized and high-quality solutions. As the market expands with more practitioners entering the field, the demand for exceptional experiences and long-term patient care has never been higher. Within this dynamic landscape, I'm proud to update today that during the reporting period, CISRM achieved an all-time high new orders rate, demonstrating its unique value to growing audience of practitioners. This milestone, driven by rapid market adoption of Alma 3 recent launches, reflects strong confidence in Alma's platforms and demonstrates the strength of our brand equity in strategic markets. I'm practically excited to announce the successful launch of Alma Harmony and introduced in North America alongside the groundbreaking new diagnostic concept, Alma IQ. CISRM has made significant leap forward in the high demand skin analysis with AlmaIQ, an intelligent skin analysis and consultation solution. This innovation transforms the consultation process by offering visually engaging and automated interactive experience that effectively addresses patient skin health concerns. Simultaneously, AlmaHarmony Alma's new innovative multimodal platform designed to tackle a wide range of skin conditions across diverse demographics has also been introduced in North America and quickly embraced by the market. In addition, the group continues the leadership in the hair removal segment with global launch of the special edition of Alma Award-leading hair removal platform Soprano Titanium. This new addition has been warmly received worldwide and includes a breakthrough applicator that enhances treatment sessions by 20% while ensuring virtually painless experience. The new and improved edition of this Soprano Titanium is also recognized as the fastest in the market by the Sapir Research, an independent global research agency. This advancement not only sets a new standard in the industry, but also provides even greater value to our customers. Furthermore, we continue to lead the way in scar treatment with Alma Hybrid, our premier platform for top tier practitioners. This latest clinical standards are paving the way for Alma Hybrid to become the first line of treatment for scars. Central to our success in our commitment to expanding CISROM unique wellness ecosystem with combined energy-based devices, skin care, injectables, and now also diagnostic tool stands as the most comprehensive synergistic product line available today. Now, I would like to take a step forward with you into the future as we mark significant advancements in CISROM injectable segment. a strategic building block within the CISROM wellness ecosystem and crucial driver for the company's long-term sustainable growth. Supported by three strategic partnerships, CISROM has built a high-end product portfolio featuring world-leading injectable brands, such as IPSA, a high-end thermal biostimulator named Profilo, the first world long-lasting botulinum toxin named Daxify, and the renowned Revancé dermal filler collection. So the market value of the injectable segment has soared, reaching multi-billion dollar figures in the recent years. Ciceram is proud to be the only company in this space that operates in both fields and delivers unique combinations of injectable products, together with the gold standard of energy-based devices, enabling a new edge of more powerful and long-lasting aesthetic results. With our comprehensive injectable portfolio and dedicated seasoned sales force, we are ready to seize opportunities in this rapidly expanding market. The group's performance for the first half of 2024 includes revenues of $168.7 million with a gross profit of $105.3 million. The latter remained the same in the corresponding period of last year, 2023. The total revenues decreased by 1.7% compared to the corresponding period in 2023, downtake preliminary due to the high interest rate environment in North America, which was offset by double-digit growth in other territories. On a year-over-year basis, our gross profit margin rose by 1.2 to 62.4. Through the reporting periods, Cicerum has made significant strides in expanding its direct sales presence in key markets and enhancing its unique wellness ecosystem, two key contributors to the company's profitable future growth. During the reporting period, we present double-digit growth in Asia Pacific, Europe, and Middle East and Africa, which increased by 15.5%, 10%, and almost 11% respectively. Aligned with the company's strategy to strengthen Asia Pacific leadership, CISRAM has significantly advanced its new offices in Japan and China, which established in H2, 2023. With our current 11 direct sites, we are confident in maintaining leadership in these markets and bringing more value to our customers within their clinics with the aim of better serving them and streamlining operations. Together with our team of long-term veterans in the aesthetic industry, this approach enables us to address rapid adjustments and achieve efficiency in every aspect of our business, allowing us to align expenses with the top line and improve gross profitability. In the current reporting period, revenue from the direct sales comprised 86% of our total revenue, with sales through distributors making up for the remaining 14%. In addition to maintaining our leadership as a premium provider, enhancing brand visibility, and strengthening relationship with partners and clients, the setup of our direct operation offices allow CISRAM to navigate macroeconomic trends much more effectively. In parallel, we continue to see enhancement and strengthening of Alma Global Brand, which drives demand and growth for our customer clinics. Our ongoing strategic partnership with Hollywood icon Kate Hudson has played a key role in this effort. This collaboration has markedly boosted brand awareness and engagement, reaching over 300 million people worldwide and generating more than 350,000 social media interactions within less than a year of its launch. Looking into the second half of the year, CISRM will continue to execute our strategy by evaluating and implementing near-future technologies and extending the company's global footprint according to the direct sales approach. In particular, promoting a whole new skincare concept and advanced in-clinic platform. We will strategically focus on strengthening corporate leadership in Asia Pacific and North America, and continue to expand Cicero unique wellness ecosystem with a high value and synergistic offering. This will involve utilizing the building blocks of energy-based devices, injectables, home-use devices, and skin care. All of this will be governed by innovative protocols designed to enhance patient results, elevate clinical practice, and increase patient satisfaction. Lastly, CISROM is committed to building close relationships with end consumers through various channels and technologies, providing continuous support to clinics with strong dedication to ensuring our partners' ongoing success and operational excellence. As always, I want to express my gratitude to all of our employees for their dedication in helping CISROM become a global leader in wellness I also want to extend our thanks to our shareholders as we move forward together on our journey. Thank you very much.

Thank you, Leo. We are all set for the Q&A session. If you are on the phone, just press the start key first, followed by the number one key to ask your question. For those joining us via the webpage, please raise your hand or type your question in the Q&A box. And a friendly reminder to our listeners, please introduce yourself and your organization before you ask your question. Thank you. The first question comes from the name of Sealand Securities. Please go ahead.