Medacta Group SA — Call Transcript 2026

Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Medacta Full Year 2025 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Francesco Siccardi, CEO of Medacta. Please go ahead, sir. Thank you. Thank you very much, and good afternoon or good morning. Welcome to Medacta Full Year 2025 Results Conference Call. The slides of today's presentation can be found on the Medacta investor relations website, along with the media release. I would like to remind all participants that the presentation includes forward-looking statements, which are subject to risks and uncertainties. Listeners and readers are therefore encouraged to refer to the disclaimer on slide two of today's presentation. After those remarks, I will now turn to slide number four of the presentation with the highlights of today's publication. We reported our revenues, EUR 684 million with 18.5% growth in constant currency. The EBITDA margin in constant currency hit 29% and 27.9% in EUR, with an increase of 19.1% year-over-year. Medacta's net profit increased as well 31% year-over-year to EUR 95.5 million. The board of director is proposing a dividend per share of CHF 1.1 with an increase of almost 60% year-over-year. We did commented already on the top line revenues. I will fly through the next slides relatively quickly. As we said, 18.5% in constant currency in 2025. Now we're bringing our CAGR for the last four years, 2021-2025, period at 17.4%. A very, very strong performance, significantly outgrowing the market, more than 4x. If we move to slide number six, we just reiterate again which are the key pillars of our above-market growth. We clearly focus on differentiating innovation with the aim of really impacting and improving patient outcomes in a sustainable healthcare way. We support the introduction of this innovation in the market with a strong focus on medical education and training for surgeons worldwide. As we needed to expand our sales force in different geographies, the constant hiring of new talents across all the different business line and the different geographies. If we move to slide number seven, we can repeat again the growth rate we experienced in the different geographies. We did grow 15.2% in the EMEIA region, 19% in North America, 23% in Asia Pacific, and 42% in Latin America. We move then to the business line growth contribution on slide number eight. Our hip grew almost 12%, knee slightly above 20%, extremities at 46%, and spine at 12%. All those growth rates are in constant currencies. To be noted that the knee business line surpassed the hip business line for the first time in 2025. Knee representing 42% of our revenues, hip 40%, extremities 10%, and spine 8%. Digging a little bit into the different business line, the hip definitely benefit from our focus on minimally invasive procedures, in particular anterior minimally invasive surgery, which has been our flag products for many years now and is now reinforced by additional platforms introduced into the market. On the next slide, number ten, we can see the very strong performance of our knee growing at almost 21%, clearly benefiting from Medacta focus and introduction of the concept of kinematic alignment. Medacta has definitely been the first company to push this concept in the market, and we are today still the only company with a dedicated and specifically designed knee, the GMK SpheriKA, which is clearly pushing our sales in a very significant way. If we move on slide 11, we can see our performance in Spine, slightly above 12%. Here as well, we focus on innovative products, mainly associated with our MySolutions platform. The focus is clearly on personalized medicine with techniques and technologies like the NextAR Spine or the Rod Optimizer. Last but not least, our extremities business line on page 12 with a very good 46.2% growth year-over-year. We did benefit as well from last year's acquisition in the sports medicine sector with the Parcus move, and the constant expansion of our shoulder arthroplasty platform associated with our NextAR technology as well. I would now ask Corrado Farsetta to go into the margins, and into the P&L. Thank you. Thank you, Francesco. Moving to slide 14. Yeah. Let me now review the financial figures of 2025. The gross profit increased by almost 15% to EUR 459 million, reflecting the strong growth in revenues. Operationally, we continue to deliver efficiency improvement, supporting the resilience of our margins, which remained solid at more than 77%, despite a negative FX impact of more than 1%. Moving to slide 15. Here you can see three lines. As usual, the gray line shows the long-term trend of our profitability, excluding translational effects since 2019. The yellow line represents our reported EBITDA margin, and the red line shows the EBITDA margin in constant currency for the year, which is then comparable with 2024 performance. As shown by the red line, in 2025, the Adjusted EBITDA margin reached 29% in constant currency, with an expansion of about 2% versus prior year, confirming the continued improvements in profitability and the strong operating leverage of this year and in general of the company over the years. Despite the negative FX impact of around 1.1%, the reported EBITDA margin was about 28%, expanding by 0.8% versus prior year. More broadly, looking at the long-term trend based on 2019 FX rates, which is the gray line, our Adjusted EBITDA margin highlight the structural and significant margin expansion achieved in recent years. Moving to slide 16. Here we see the net profit for the period reached EUR 95.5 million, compared to EUR 73 million last year, which is an increase of more than 30% year-over-year. This includes also the one-off effects related to the acquisition completed at the beginning of 2025. Moving to slide 17. The strong growth of the company has required and continues to require additional instruments, facilities, and production capacity, and this is where our investments are focused. Total CapEx amounted to EUR 137 million last year, mainly related to instruments as always, EUR 78 million. Land, buildings, and production capacity, EUR 35 million. Research and development for EUR 15 million. Investments in facilities and production capacity reported are under other tangibles include the expansion of our production site here in Rancate, and new fully automated warehouse and logistics hub in Italy. Moving to slide 18. You can see here our robust cash flow generation. In 2025, the cash flow from operating activities reached EUR 153 million, reflecting the strong profitability and the solid cash generation of the business, thanks to focus on the effective usage of all our assets. This allowed us to largely self-finance our investment program for EUR 137 million, as just discussed. As a result, the free cash flow increased to EUR 16 million in 2025. Moving to slide 19. Our balance sheet, as you see, remains very solid with the leverage in 2025 down to 0.88x the EBITDA of the company. Over the past five years, you see the red line is the average ratio, which was around 0.94, confirming our disciplined financial profile and the strong capacity to support our growth. The last slide from my side is the dividend per share. As Francesco said, the board is going to propose a dividend of CHF 1.1 per share, representing an increase of about 60% compared to the prior year. With this, I will now hand over to Francesco for the outlook, 2026 and midterm and some final remarks. Thank you, Corrado. The outlook is reported on page 22 of our presentation. For 2026, Medacta is targeting a revenue growth in the range of 10%-14% in constant currency and an expansion of the Adjusted EBITDA margin of around 50 basis points versus prior year, which we closed at 27.9% in constant currency, subject to unforeseen events. We did expand our midterm outlook as well. The revenue compound annual growth rate for the period 2024-2027 in constant currency is expected to range now between 12%-15%, with a gradual improvement constant currency and subject to unforeseen events. We just reiterate as well the situation in terms of tariffs. Medacta remains not impacted by the U.S. tariffs. We continue, of course, to monitor the development of this situation together with the rest of the global world. Last point on slide 23, my key messages is to highlight once again the excellent and continued above-market growth of 18.5% in constant currency year-over-year. This results from our strong focus on differentiating innovations that really have an impact and improve patient outcomes and healthcare sustainability. This innovation is sustained by medical education and personalized training for surgeons, which allows us as well to expand our sales reps and team across the different geographies and across the different business line. The effect of this expansion and careful execution is that we can maintain very strong financials. We have seen a very strong soaring of our profitability, operating cash flow and dividend. The expansion of the Adjusted EBITDA while growing at this pace is really extraordinary. The record net profit of EUR 95.5 million, which represent now 14% of revenue. An increase of our operating cash flow by more than 42% to more than EUR 150 million. As we said before, proposed dividend increase of almost 60% to CHF 1.1 per share. Our goal, which is reflected in our short and midterm guidance, is to continue to outgrow the market for the foreseeable future. I would like to thank for this excellent performance once again all our employees worldwide, of course, all our customers that continue to believe in our products, all our suppliers and partners worldwide. Thank you. Thank you really to all of you for the support. I think is now maybe time for Q&A. Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question comes from Sam England of Berenberg. Please go ahead. Hi, guys. Thanks for taking the questions. The first one, can you just provide some color on what's changed over the past few months to support the increase in the midterm revenue guide? I suppose in particular, which segments or geographies are now expected to perform better than your previous expectations to support the raise? Then also around the midterm guide, you're now guiding to a gradual improvement in margins. Can you talk about the shift in messaging there and why you're expecting margins to expand? I think previously when you've talked about it, you said you'd rather reinvest in the business to drive growth as opposed to letting margins expand. Is there a shift in focus implied there? A little bit of color around that would be good as well. Thanks. Thank you, Sam. I will take the second question on the margin expansion. We have seen that under an operational point of view, we can really achieve what we want to achieve in terms of growth with, at the same time, the ability to slightly expand margins. We were maybe a little bit cautious when we provided the previous guidance, and we wanted to have a little bit of space to operate. We believe we can achieve our midterm top line guidance while at the same time expanding margins. This means that we did identify, for example, some important synergies. Stronger synergies between shoulder and sports medicine and joint and sports medicine both in terms of medical education, in terms of sales force, in terms of marketing. Those are not only positive under a practical point of view, but they do actually have an impact under a P&L point of view. I would maybe like to ask Corrado to take on the midterm CAGR, because it's probably more mathematical than anything else, given our past performance. Yeah, sure. Basically, the revision of the guidance, the CAGR, is the result of the super strong performance in 2025. The guidance that we gave for 2026. For 2027, it's just okay. We believe that the picture, the framework is not going to change. Basically based on our three-year plan, the result of the top line expansion in 2027 will be then based on this CAGR, three-year CAGR between 12% and 15%. It's just an arithmetical calculation, taking into account that 2025 was already achieved. The guidance for 2026 was given, so the result, based on what we see in the future, it should be between 12% and 15%. This is what we think, it's just an arithmetical update. Okay, great. Thanks very much. Yeah. The next question is from Ed Hall of Stifel. Please go ahead. Thank you very much for taking my questions. A couple from me. Just firstly on the profitability, and I appreciate you don't break it out in terms of sub-segments, but is it still fair to assume that the smaller units, extremity and spine, are operating at negative margin? If that is the case, when do you expect these to turn positive? That'd be my first question, then I'll follow up afterward. Yeah, I can take this, of course, under a qualitative point of view. Spine is not a negative contributor. It is dilutive versus the core business if you consider hip and knee, but it's not negative. Actually, it is improving year-over-year. That is maybe another element I should have mentioned before talking about margin expansions. The extremities is we basically have two product lines within extremities. One, which is the shoulder arthroplasty, which is extremely positive in terms of contribution margin. Then we have a sports medicine, which is in an earlier stage, and it does require probably more dedicated sales force. I mentioned that there are some synergies, but it's definitely still negative and it will remain negative, although reducing the negative profitability year over year while we scale this business. It is still fair to say that the smaller business line are dilutive, but spine is not negative. Within extremities only, sports medicine is still negative, but is very small. Okay, that's really clear. Just another question on sort of CapEx expectations for this year, given a lot of the expansion that you've done in your facilities in Switzerland is coming to an end. I'm curious as what that would look like as things stand today. I don't think, frankly, actually, I hope it will not come to an end because it will mean that we are significantly slowing down. As you know, the CapEx we are referring to, both manufacturing capacity and instrument are growth-related CapEx. We have quite ambitious plans ahead of us for the next five to seven years. We definitely need to continue to finish at least our expansion plans here in Europe. We will continue to feed the market with instruments associated with new customers generation. We do have new products launching expected in the second half, end of the year. We don't expect at all a decrease in our required CapEx. We might add a little bit more color in the future, in the next maybe yearly call at the end of H1, to share with the market a little bit more details of what we expect to do in the upcoming years in terms of CapEx needs and opportunities. We see a lot of opportunities and we are very happy actually to invest in our growth. We have a very good in our opinion return on invested capital and we are not afraid to invest in our future. Perfect. Thanks a lot. Thank you, Ed. The next question comes from Sandra Dicht of Octavian. Please go ahead. Yes, good afternoon, and thank you for taking my questions. I have also a few. Maybe I take them one by one. Sorry to follow up again on the margin topic, but, given what you just mentioned, is it fair to say that kind of the majority of the improvement is coming from scaling up the currently dilutive segment like the spine and sports medicine? Or do you also expect margins in the core hip and knee business to improve from the current levels? Thank you, Sandra, for the question. We actually see both effects. We definitely have still margin improvements on the core business of Medacta, the hip and knee. We do see as well, as I was mentioning, a less dilutive effect from spine. Shoulder is definitely continued to expand as well, its marginality. From those core business, we can now finance fully our sports med. It's both the effect of decreasing dilution of the smaller lines and still significant expansion on the core hip and knee side, both under a manufacturing and operational point of view, vertical integration point of view in manufacturing still. Some leverages because we still have some markets like U.K., Spain, Italy, Germany, where we are growing very, very fast, and therefore we can see some leverage on the fixed cost and improved marginality at country level. Okay. Super. Thank you. One on your U.S. business. Excluding the impact from Parcus, 'cause I estimate that organic growth in the U.S. was in the mid-teens range last year, and that was certainly supported by your strong exposure also to the ambulatory surgical centers. You previously indicated that this ASC segment could grow around 25% annually, that you have some 40% of your U.S. business is already generated through this channel. Just from this tailwind from the ASC segment alone, that should make it relatively straightforward to sustain a mid-teens growth in the U.S. Is that the correct way to look at it, or are there any factors that could make it more challenging to have such a growth level going forward? Yeah, unfortunately, it's a little bit more challenging than just automatically following the market trends simply because of sales force expansion. Without a sales force, you cannot capture this transition from hospital to ASCs. We have been actually further expanding our percentage of revenues in ASC versus hospital in the U.S. We are around now 45% compared to previous year, and we expect this to continue to be the case. You really need to think about sales force expansion as a key necessary driver for our growth in the U.S. We are covering between 2% and 3% market share in the U.S. We need boots on the ground to really spread Medacta message and cover surgeons that are transitioning from hospital to ASC. As well, we are starting, for example, to work with prominent academic centers, large hospitals. It's all about distribution. I think we have a very good products across the different business line that prove their ability to improve patient outcome. We need sales people and sales force, and that's the constant game for us across the different geographies and in particular in the U.S. Hiring good talent, sales people which are happy to jump on board and sell our product ranges. Perfect. Thank you. Appreciate the details. Then I have a very quick one for Corrado on the tax rate, as it was just last year, a little bit higher than what I had expected. Can you help us? What a good tax rate level to assume going forward for Medacta Group? Yeah, sure. Hi, Sandra. Let's say the increase in 2025 is attributable to some, let's say, transfer pricing optimization policy that we have implemented at group level, which means that basically some of our tax assets that we accrued in the past have been now relieved in 2025. Given the higher tax rate in the other countries, this has generated an increase in the average group tax rate in 2025. This can be considered as a, let's say, a one-off effect because it's not that we are going to review again significantly our tax policy, but this was happening in 2025. For 2026 and 2027, I think that we should go down to 16%, more or less. We should be confirmed for the next two years. The other change that we are still not able to judge in terms of Let's say impact on our tax rate is the application of Pillar Two from 2028. It is not feasible because today is not still 100% clear how this will be implemented in Switzerland. We don't think it's going to significantly change the tax rate from 2028 onward, but I would say that definitely 2026 and 2027, we should go back to 16% more or less. Oh, super. Very clear. Thank you. Good. Thank you. The next question comes from Michelle Buschler of Zurich Cantonal Bank. Please go ahead. Hello. Thank you for taking my questions. I have a question on geographic expansion. Would you give us some more color on the efficiency gains we can expect from the Italy facility? Also, I saw you mentioned a new subsidiary in India. Do you have plans on expanding to India? Thank you. Yeah, I can take this question. I guess you are referring to our new operation facility, the distribution center in the southern part of Europe. This distribution center would potentially have a decrease in some of our shipping costs for southern part of Europe and a decrease as well in net working capital in stock that is currently distributed across different warehouses in the southern part of Europe, Italy, Spain, Switzerland, Austria, etc. We will be able to concentrate most of the stock in one location, reducing net working capital requirements, and at the same time, as I said, potentially reducing our shipping costs. We will probably see an impact more in 2027 than in 2026, but it's definitely something that will help us to improve and constantly increase our margins. That's a good thing. Regarding India, if I address your first point, India will be, of course, a new venture. We are starting from scratch. Our products are not yet cleared under a regulatory point of view. It might happen any day now, any week, but you never know with the regulatory. You can wait another quarter, or maybe it's tomorrow. In any case, we are ready. We have prepared the market. We have hired some key people. We lined up distributors. We started already to train surgeons on cadaver labs, and we can expect a good start. We have seen a very good appetite for our products in the Indian market, which is a rapidly growing market, probably around 10%-12% per year growth. Prices are okay, in line with some of the European markets. We can definitely start to compete, and we are ready to roll. Thank you. Thank you, Michelle. The next question is from Graham Doyle of UBS. Please go ahead. Afternoon. Thanks, guys. Just one for Francesco and then a couple quick ones for Corrado. Francesco, just on knee, it's been incredibly strong. We are seeing some launches from some of the bigger competitors over the course of this year. Do you think that they're more kind of catch-up launches and you're still ahead? Is there anything in the pipeline on knees that makes you quite excited in terms of your own developments? Just quickly, Corrado, on the guidance. The midterm guidance around EBITDA, nice to see that sequential improvement. Would you expect EBIT margins to improve, so after accounting for D&A? Is it fair, when I look at the top-line guidance, when we just work out the math, that we should expect something like 10% growth in 2027, if you hit the midpoints? Thank you, guys. Thank you, Graham, for the question. Just to make sure I address your first question on the knee correctly, which are the launches you would like me to comment about and to position our knee versus our competitors? Just to make sure we have seen the same things. Yeah. There's a couple of things from Stryker, and we're seeing a new platform from Smith+Nephew. As the Landmark Knee is one that's a little interesting. It doesn't look to be quite the same as what you guys have. It looks slightly different and maybe not as much functionality. But just to get a sense of how far you think the gap is between- Yeah. What you guys currently offer and where the competition is. Also, genuinely, what are you working on next? 'Cause you have led the way. Yes. If we talk about Stryker, they've been presenting at the last academy a couple of weeks ago an expansion of their portfolio, which brings them on par with what Zimmer and DePuy and Smith & Nephew already did 3-4 years ago with their medial congruent insert. That is what they are about to launch, and frankly, was about time because they were the last, let's say, to join the club of the medially constrained liners. Which are still quite a bit different compared to our first generation ball-and-socket design, which was Sphere, and still a generation behind compared to SpheriKA, which has been further adapted in its shape of the patellofemoral joint. Some elements of the components of the design, which have been clearly adapted to kinematic alignment. At the moment, we know they're starting to work on and they understand that they needed to redesign their knees, and I believe this will give us at least another 3-4 years, especially in Europe, even longer, of a window where we think we can definitely show how our different design is superior. Talking about the future, we are working on our future generation of products as well across knee portfolio, technology portfolio, hip portfolio, and we definitely look forward to come out with the next improvement, hopefully when our competitors will try to catch up in 3-4 years. As we all know, innovation is a very dynamic definition. If you stop to innovate, you become a commodity and an older product relatively soon. We cannot stay still, and we are already very active in developing the next generation. I hope I addressed your question, and I would then leave the floor to Corrado. Yeah. Yeah, sure. Let's speak a bit about the midterm guidance. We wanted to update both top line, of course, and EBITDA margin. I will start from the top line again. As you know, we have done 18.5% in 2025, which means that we have also guided for 2026, 10%-14%. Let's say the following scenarios happen. If we say that we perform 10% in 2026 and 10% in 2027, then the midterm would result into something in the region of 12% in the three-year plan, in the three-year CAGR. If we perform 14% in 2027 and 14% high end of the guidance in 2027, then you will finish to 15% more or less. That's why we updated the range in the way we said before. Basically, I believe that something in the region between, say, 12%-15% is what we will expect based on the results and the guidance on 2026. Speaking about the EBITDA margin expansion, if you remember, we guided in 2024 to be stable at 2024 EBITDA margin. Last year, we updated the guidance. We increased this to 28%, which was already an expansion. Now, based on this year very good performance, we decided to update and guide again the further expansion in the coming years because there is, let's say, more or less half a point coming in 2026 and something similar in the region of 0.5 of a point again in 2027. What we could see is an expansion of this size between 2026 and 2027. We didn't want to give a precise number because we believe that in this case, the cost and currency is difficult to apply because we are basing our calculations on 2024 currency rates, which we understand is difficult for you to follow. That's why we guided as gradual expansion in 2026 and 2027. Oh, thank you very much, guys. Thank Francesco for a really detailed answer. It was very helpful. Corrado, it was very clear on the revenue, so that's super helpful. Just on the margin, what I meant was more, it totally makes sense that EBITDA margins expand, but EBIT, so after you account for the cost of depreciation and amortization, would you expect EBIT margins to expand as well? I would give something similar in terms of expansion. More or less the same expansion of the EBITDA margin, you could use the same expansion for the EBIT margin. Okay. More or less, we believe that the D&A should stay more or less in line with this year over the next year. That's why I believe that the EBIT expansion should be aligned with the EBITDA margin expansion. Perfect. Thank you so much. That's really clear. Thanks a lot for the time, guys. Thank you. For any further questions, please press star and one on your telephone. The next question is a follow-up from Ed Hall of Stifel. Please go ahead. Thank you for taking my additional question. It was just a question on this year's guidance of 10%-14% in constant currency. If I do the math on last year's absolute revenue that you added on a constant currency level, it was around EUR 100 million-EUR 110 million. Now, if we look at this guidance for this year, the absolute number added is a bit of a step change down. I was curious as to what are the reasons for that? Is there a layer of conservatism in there? Is there product launches from competitors that you are taking into account? Or is there something that I am missing on that analysis? Any clarity there would be amazing. You know, I think that to take for granted that every year you can add EUR 100 million just because you did it the previous year, it's a little bit simplistic. As I said, we do have really to find and to feed sales force expansion and that's a constant effort. It's always a challenge to find those people at the speed we want. We think that 10%-14% remains very challenging. We do not expect, frankly, the market to continue to be that strong. We have seen some markets as well with some price reduction that has been announced in France, in Belgium, in Japan, so you have to consider that as well. There are some elements that call for a little bit of caution, and I think 10%-14% remains a very substantial growth rate, especially again, compared to the market and to our peers. Can we do better? I think it's very challenging to do better, but we have been positively surprised ourselves in the last five years. I'm happy to be surprised by our performance every year, frankly. This is a number that we think is solid. It's challenging. It's difficult. It's a battle every day to go and take market share. We are ready to fight this battle, of course, but we don't give it for granted. You know, the past year performance is not predictive of the future year performance, as you well know. No, absolutely. Thanks a lot for that clarity. It's super helpful. Thank you very much. Oh, sorry, Ed. Just another point. There was an acquisition as well last year, so let's consider that as well when you look at the absolute numbers. Yeah, absolutely. Perfect. Thank you. Yeah. Thank you. That was the last question. Gentlemen, back to you for any closing remarks you may have. No, I would like once again to really thank our team across the globe, our customers, suppliers and partners, because it's always tough to grow at this pace, and we try to do it in a very diligent way, which is even tougher. Congratulations to all our team members worldwide, and a big thank you for all our customers and suppliers. Thanks a lot. Thank you for your attention, and speak to you soon. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.

Speaker 6: Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Medacta Full Year 2025 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Francesco Siccardi, CEO of Medacta. Please go ahead, sir. Good afternoon. good afternoon This is the Chorus Call Conference operator. this is the chorus call conference operator Welcome, and thank you for joining the Medacta Full Year 2025 Results Conference Call. welcome and thank you for joining the medacta full year 2025 results conference call As a reminder, all participants are in listen-only mode. as a reminder all participants are in listen-only mode After the presentation, there will be an opportunity to ask questions. after the presentation there will be an opportunity to ask questions Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. should anyone need assistance during the conference call they may signal an operator by pressing star and zero on their telephone At this time, I would like to turn the conference over to Mr. Francesco Siccardi, CEO of Medacta. at this time i would like to turn the conference over to mr francesco siccardi ceo of medacta Please go ahead, sir. please go ahead sir

Speaker 3: Thank you. Thank you very much, and good afternoon or good morning. Welcome to Medacta Full Year 2025 Results Conference Call. The slides of today's presentation can be found on the Medacta investor relations website, along with the media release. I would like to remind all participants that the presentation includes forward-looking statements, which are subject to risks and uncertainties. Listeners and readers are therefore encouraged to refer to the disclaimer on slide two of today's presentation. After those remarks, I will now turn to slide number four of the presentation with the highlights of today's publication. We reported our revenues, EUR 684 million with 18.5% growth in constant currency. Thank you. thank you Thank you very much, and good afternoon or good morning. thank you very much and good afternoon or good morning Welcome to Medacta Full Year 2025 Results Conference Call. welcome to medacta full year 2025 results conference call The slides of today's presentation can be found on the Medacta investor relations website, along with the media release. the slides of today's presentation can be found on the medacta investor relations website along with the media release I would like to remind all participants that the presentation includes forward-looking statements, which are subject to risks and uncertainties. i would like to remind all participants that the presentation includes forward-looking statements which are subject to risks and uncertainties Listeners and readers are therefore encouraged to refer to the disclaimer on slide two of today's presentation. listeners and readers are therefore encouraged to refer to the disclaimer on slide two of today's presentation After those remarks, I will now turn to slide number four of the presentation with the highlights of today's publication. after those remarks i will now turn to slide number four of the presentation with the highlights of today's publication We reported our revenues, EUR 684 million with 18.5% growth in constant currency. we reported our revenues eur 684 million with 18.5% growth in constant currency The EBITDA margin in constant currency hit 29% and 27.9% in EUR, with an increase of 19.1% year-over-year. Medacta's net profit increased as well 31% year-over-year to EUR 95.5 million. The board of director is proposing a dividend per share of CHF 1.1 with an increase of almost 60% year-over-year. We did commented already on the top line revenues. I will fly through the next slides relatively quickly. As we said, 18.5% in constant currency in 2025. The EBITDA margin in constant currency hit 29% and 27.9% in EUR, with an increase of 19.1% year-over-year. the ebitda margin in constant currency hit 29% and 27.9% in eur with an increase of 19.1% year-over-year Medacta's net profit increased as well 31% year-over-year to EUR 95.5 million. medacta's net profit increased as well 31% year-over-year to eur 95.5 million The board of director is proposing a dividend per share of CHF 1.1 with an increase of almost 60% year-over-year. the board of director is proposing a dividend per share of chf 1.1 with an increase of almost 60% year-over-year We did commented already on the top line revenues. we did commented already on the top line revenues I will fly through the next slides relatively quickly. i will fly through the next slides relatively quickly As we said, 18.5% in constant currency in 2025. as we said 18.5% in constant currency in 2025 Now we're bringing our CAGR for the last four years, 2021-2025, period at 17.4%. A very, very strong performance, significantly outgrowing the market, more than 4x. If we move to slide number six, we just reiterate again which are the key pillars of our above-market growth. We clearly focus on differentiating innovation with the aim of really impacting and improving patient outcomes in a sustainable healthcare way. We support the introduction of this innovation in the market with a strong focus on medical education and training for surgeons worldwide. Now we're bringing our CAGR for the last four years, 2021-2025, period at 17.4%. now we're bringing our cagr for the last four years 2021-2025 period at 17.4% A very, very strong performance, significantly outgrowing the market, more than 4x . a very very strong performance significantly outgrowing the market more than 4x If we move to slide number six, we just reiterate again which are the key pillars of our above-market growth. if we move to slide number six we just reiterate again which are the key pillars of our above-market growth We clearly focus on differentiating innovation with the aim of really impacting and improving patient outcomes in a sustainable healthcare way. we clearly focus on differentiating innovation with the aim of really impacting and improving patient outcomes in a sustainable healthcare way We support the introduction of this innovation in the market with a strong focus on medical education and training for surgeons worldwide. we support the introduction of this innovation in the market with a strong focus on medical education and training for surgeons worldwide As we needed to expand our sales force in different geographies, the constant hiring of new talents across all the different business line and the different geographies. If we move to slide number seven, we can repeat again the growth rate we experienced in the different geographies. We did grow 15.2% in the EMEIA region, 19% in North America, 23% in Asia Pacific, and 42% in Latin America. We move then to the business line growth contribution on slide number eight. Our hip grew almost 12%, knee slightly above 20%, extremities at 46%, and spine at 12%. All those growth rates are in constant currencies. As we needed to expand our sales force in different geographies, the constant hiring of new talents across all the different business line and the different geographies. as we needed to expand our sales force in different geographies the constant hiring of new talents across all the different business line and the different geographies If we move to slide number seven, we can repeat again the growth rate we experienced in the different geographies. if we move to slide number seven we can repeat again the growth rate we experienced in the different geographies We did grow 15.2% in the EMEIA region, 19% in North America, 23% in Asia Pacific, and 42% in Latin America. we did grow 15.2% in the emeia region 19% in north america 23% in asia pacific and 42% in latin america We move then to the business line growth contribution on slide number eight. we move then to the business line growth contribution on slide number eight Our hip grew almost 12%, knee slightly above 20%, extremities at 46%, and spine at 12%. our hip grew almost 12% knee slightly above 20% extremities at 46% and spine at 12% All those growth rates are in constant currencies. all those growth rates are in constant currencies To be noted that the knee business line surpassed the hip business line for the first time in 2025. Knee representing 42% of our revenues, hip 40%, extremities 10%, and spine 8%. Digging a little bit into the different business line, the hip definitely benefit from our focus on minimally invasive procedures, in particular anterior minimally invasive surgery, which has been our flag products for many years now and is now reinforced by additional platforms introduced into the market. On the next slide, number ten, we can see the very strong performance of our knee growing at almost 21%, clearly benefiting from Medacta focus and introduction of the concept of kinematic alignment. To be noted that the knee business line surpassed the hip business line for the first time in 2025. to be noted that the knee business line surpassed the hip business line for the first time in 2025 Knee representing 42% of our revenues, hip 40%, extremities 10%, and spine 8%. knee representing 42% of our revenues hip 40% extremities 10% and spine 8% Digging a little bit into the different business line, the hip definitely benefit from our focus on minimally invasive procedures, in particular anterior minimally invasive surgery, which has been our flag products for many years now and is now reinforced by additional platforms introduced into the market. digging a little bit into the different business line the hip definitely benefit from our focus on minimally invasive procedures in particular anterior minimally invasive surgery which has been our flag products for many years now and is now reinforced by additional platforms introduced into the market On the next slide, number ten, we can see the very strong performance of our knee growing at almost 21%, clearly benefiting from Medacta focus and introduction of the concept of kinematic alignment. on the next slide number ten we can see the very strong performance of our knee growing at almost 21% clearly benefiting from medacta focus and introduction of the concept of kinematic alignment Medacta has definitely been the first company to push this concept in the market, and we are today still the only company with a dedicated and specifically designed knee, the GMK SpheriKA, which is clearly pushing our sales in a very significant way. If we move on slide 11, we can see our performance in Spine, slightly above 12%. Here as well, we focus on innovative products, mainly associated with our MySolutions platform. The focus is clearly on personalized medicine with techniques and technologies like the NextAR Spine or the Rod Optimizer. Last but not least, our extremities business line on page 12 with a very good 46.2% growth year-over-year. Medacta has definitely been the first company to push this concept in the market, and we are today still the only company with a dedicated and specifically designed knee, the GMK SpheriKA, which is clearly pushing our sales in a very significant way. medacta has definitely been the first company to push this concept in the market and we are today still the only company with a dedicated and specifically designed knee the gmk spherika which is clearly pushing our sales in a very significant way If we move on slide 11, we can see our performance in Spine, slightly above 12%. if we move on slide 11 we can see our performance in spine slightly above 12% Here as well, we focus on innovative products, mainly associated with our MySolutions platform. here as well we focus on innovative products mainly associated with our mysolutions platform The focus is clearly on personalized medicine with techniques and technologies like the NextAR Spine or the Rod Optimizer. the focus is clearly on personalized medicine with techniques and technologies like the nextar spine or the rod optimizer Last but not least, our extremities business line on page 12 with a very good 46.2% growth year-over-year. last but not least our extremities business line on page 12 with a very good 46.2% growth year-over-year We did benefit as well from last year's acquisition in the sports medicine sector with the Parcus move, and the constant expansion of our shoulder arthroplasty platform associated with our NextAR technology as well. I would now ask Corrado Farsetta to go into the margins, and into the P&L. Thank you. We did benefit as well from last year's acquisition in the sports medicine sector with the Parcus move, and the constant expansion of our shoulder arthroplasty platform associated with our NextAR technology as well. we did benefit as well from last year's acquisition in the sports medicine sector with the parcus move and the constant expansion of our shoulder arthroplasty platform associated with our nextar technology as well I would now ask Corrado Farsetta to go into the margins, and into the P&L. i would now ask corrado farsetta to go into the margins and into the p&l Thank you. thank you

Speaker 1: Thank you, Francesco. Moving to slide 14. Yeah. Let me now review the financial figures of 2025. The gross profit increased by almost 15% to EUR 459 million, reflecting the strong growth in revenues. Operationally, we continue to deliver efficiency improvement, supporting the resilience of our margins, which remained solid at more than 77%, despite a negative FX impact of more than 1%. Moving to slide 15. Here you can see three lines. As usual, the gray line shows the long-term trend of our profitability, excluding translational effects since 2019. The yellow line represents our reported EBITDA margin, and the red line shows the EBITDA margin in constant currency for the year, which is then comparable with 2024 performance. Thank you, Francesco. thank you francesco Moving to slide 14. moving to slide 14 Yeah. yeah Let me now review the financial figures of 2025. let me now review the financial figures of 2025 The gross profit increased by almost 15% to EUR 459 million, reflecting the strong growth in revenues. the gross profit increased by almost 15% to eur 459 million reflecting the strong growth in revenues Operationally, we continue to deliver efficiency improvement, supporting the resilience of our margins, which remained solid at more than 77%, despite a negative FX impact of more than 1%. operationally we continue to deliver efficiency improvement supporting the resilience of our margins which remained solid at more than 77% despite a negative fx impact of more than 1% Moving to slide 15. moving to slide 15 Here you can see three lines. here you can see three lines As usual, the gray line shows the long-term trend of our profitability, excluding translational effects since 2019. as usual the gray line shows the long-term trend of our profitability excluding translational effects since 2019 The yellow line represents our reported EBITDA margin, and the red line shows the EBITDA margin in constant currency for the year, which is then comparable with 2024 performance. the yellow line represents our reported ebitda margin and the red line shows the ebitda margin in constant currency for the year which is then comparable with 2024 performance As shown by the red line, in 2025, the Adjusted EBITDA margin reached 29% in constant currency, with an expansion of about 2% versus prior year, confirming the continued improvements in profitability and the strong operating leverage of this year and in general of the company over the years. Despite the negative FX impact of around 1.1%, the reported EBITDA margin was about 28%, expanding by 0.8% versus prior year. More broadly, looking at the long-term trend based on 2019 FX rates, which is the gray line, our Adjusted EBITDA margin highlight the structural and significant margin expansion achieved in recent years. Moving to slide 16. Here we see the net profit for the period reached EUR 95.5 million, compared to EUR 73 million last year, which is an increase of more than 30% year-over-year. As shown by the red line, in 2025, the Adjusted EBITDA margin reached 29% in constant currency, with an expansion of about 2% versus prior year, confirming the continued improvements in profitability and the strong operating leverage of this year and in general of the company over the years. as shown by the red line in 2025 the adjusted ebitda margin reached 29% in constant currency with an expansion of about 2% versus prior year confirming the continued improvements in profitability and the strong operating leverage of this year and in general of the company over the years Despite the negative FX impact of around 1.1%, the reported EBITDA margin was about 28%, expanding by 0.8% versus prior year. despite the negative fx impact of around 1.1% the reported ebitda margin was about 28% expanding by 0.8% versus prior year More broadly, looking at the long-term trend based on 2019 FX rates, which is the gray line, our Adjusted EBITDA margin highlight the structural and significant margin expansion achieved in recent years. more broadly looking at the long-term trend based on 2019 fx rates which is the gray line our adjusted ebitda margin highlight the structural and significant margin expansion achieved in recent years Moving to slide 16. moving to slide 16 Here we see the net profit for the period reached EUR 95.5 million, compared to EUR 73 million last year, which is an increase of more than 30% year-over-year. here we see the net profit for the period reached eur 95.5 million compared to eur 73 million last year which is an increase of more than 30% year-over-year This includes also the one-off effects related to the acquisition completed at the beginning of 2025. Moving to slide 17. The strong growth of the company has required and continues to require additional instruments, facilities, and production capacity, and this is where our investments are focused. Total CapEx amounted to EUR 137 million last year, mainly related to instruments as always, EUR 78 million. Land, buildings, and production capacity, EUR 35 million. Research and development for EUR 15 million. Investments in facilities and production capacity reported are under other tangibles include the expansion of our production site here in Rancate, and new fully automated warehouse and logistics hub in Italy. Moving to slide 18. You can see here our robust cash flow generation. This includes also the one-off effects related to the acquisition completed at the beginning of 2025. this includes also the one-off effects related to the acquisition completed at the beginning of 2025 Moving to slide 17. moving to slide 17 The strong growth of the company has required and continues to require additional instruments, facilities, and production capacity, and this is where our investments are focused. the strong growth of the company has required and continues to require additional instruments facilities and production capacity and this is where our investments are focused Total CapEx amounted to EUR 137 million last year, mainly related to instruments as always, EUR 78 million. total capex amounted to eur 137 million last year mainly related to instruments as always eur 78 million Land, buildings, and production capacity, EUR 35 million. land buildings and production capacity eur 35 million Research and development for EUR 15 million. research and development for eur 15 million Investments in facilities and production capacity reported are under other tangibles include the expansion of our production site here in Rancate, and new fully automated warehouse and logistics hub in Italy. investments in facilities and production capacity reported are under other tangibles include the expansion of our production site here in rancate and new fully automated warehouse and logistics hub in italy Moving to slide 18. moving to slide 18 You can see here our robust cash flow generation. you can see here our robust cash flow generation In 2025, the cash flow from operating activities reached EUR 153 million, reflecting the strong profitability and the solid cash generation of the business, thanks to focus on the effective usage of all our assets. This allowed us to largely self-finance our investment program for EUR 137 million, as just discussed. As a result, the free cash flow increased to EUR 16 million in 2025. Moving to slide 19. Our balance sheet, as you see, remains very solid with the leverage in 2025 down to 0.88x the EBITDA of the company. Over the past five years, you see the red line is the average ratio, which was around 0.94, confirming our disciplined financial profile and the strong capacity to support our growth. The last slide from my side is the dividend per share. In 2025, the cash flow from operating activities reached EUR 153 million, reflecting the strong profitability and the solid cash generation of the business, thanks to focus on the effective usage of all our assets. in 2025 the cash flow from operating activities reached eur 153 million reflecting the strong profitability and the solid cash generation of the business thanks to focus on the effective usage of all our assets This allowed us to largely self-finance our investment program for EUR 137 million, as just discussed. this allowed us to largely self-finance our investment program for eur 137 million as just discussed As a result, the free cash flow increased to EUR 16 million in 2025. as a result the free cash flow increased to eur 16 million in 2025 Moving to slide 19. moving to slide 19 Our balance sheet, as you see, remains very solid with the leverage in 2025 down to 0.88x the EBITDA of the company. our balance sheet as you see remains very solid with the leverage in 2025 down to 0.88x the ebitda of the company Over the past five years, you see the red line is the average ratio, which was around 0.94, confirming our disciplined financial profile and the strong capacity to support our growth. The last slide from my side is the dividend per share. over the past five years you see the red line is the average ratio which was around 0.94 confirming our disciplined financial profile and the strong capacity to support our growth. the last slide from my side is the dividend per share As Francesco said, the board is going to propose a dividend of CHF 1.1 per share, representing an increase of about 60% compared to the prior year. With this, I will now hand over to Francesco for the outlook, 2026 and midterm and some final remarks. As Francesco said, the board is going to propose a dividend of CHF 1.1 per share, representing an increase of about 60% compared to the prior year. as francesco said the board is going to propose a dividend of chf 1.1 per share representing an increase of about 60% compared to the prior year With this, I will now hand over to Francesco for the outlook, 2026 and midterm and some final remarks. with this i will now hand over to francesco for the outlook 2026 and midterm and some final remarks

Speaker 3: Thank you, Corrado. The outlook is reported on page 22 of our presentation. For 2026, Medacta is targeting a revenue growth in the range of 10%-14% in constant currency and an expansion of the Adjusted EBITDA margin of around 50 basis points versus prior year, which we closed at 27.9% in constant currency, subject to unforeseen events. We did expand our midterm outlook as well. The revenue compound annual growth rate for the period 2024-2027 in constant currency is expected to range now between 12%-15%, with a gradual improvement constant currency and subject to unforeseen events. We just reiterate as well the situation in terms of tariffs. Medacta remains not impacted by the U.S. tariffs. Thank you, Corrado. thank you corrado The outlook is reported on page 22 of our presentation. the outlook is reported on page 22 of our presentation For 2026, Medacta is targeting a revenue growth in the range of 10%-14% in constant currency and an expansion of the Adjusted EBITDA margin of around 50 basis points versus prior year, which we closed at 27.9% in constant currency, subject to unforeseen events. for 2026 medacta is targeting a revenue growth in the range of 10%-14% in constant currency and an expansion of the adjusted ebitda margin of around 50 basis points versus prior year which we closed at 27.9% in constant currency subject to unforeseen events We did expand our midterm outlook as well. we did expand our midterm outlook as well The revenue compound annual growth rate for the period 2024-2027 in constant currency is expected to range now between 12%-15%, with a gradual improvement constant currency and subject to unforeseen events. the revenue compound annual growth rate for the period 2024-2027 in constant currency is expected to range now between 12%-15% with a gradual improvement constant currency and subject to unforeseen events We just reiterate as well the situation in terms of tariffs. we just reiterate as well the situation in terms of tariffs Medacta remains not impacted by the U.S. tariffs. medacta remains not impacted by the u.s tariffs We continue, of course, to monitor the development of this situation together with the rest of the global world. Last point on slide 23, my key messages is to highlight once again the excellent and continued above-market growth of 18.5% in constant currency year-over-year. This results from our strong focus on differentiating innovations that really have an impact and improve patient outcomes and healthcare sustainability. This innovation is sustained by medical education and personalized training for surgeons, which allows us as well to expand our sales reps and team across the different geographies and across the different business line. The effect of this expansion and careful execution is that we can maintain very strong financials. We continue, of course, to monitor the development of this situation together with the rest of the global world. we continue of course to monitor the development of this situation together with the rest of the global world Last point on slide 23, my key messages is to highlight once again the excellent and continued above-market growth of 18.5% in constant currency year-over-year. last point on slide 23 my key messages is to highlight once again the excellent and continued above-market growth of 18.5% in constant currency year-over-year This results from our strong focus on differentiating innovations that really have an impact and improve patient outcomes and healthcare sustainability. this results from our strong focus on differentiating innovations that really have an impact and improve patient outcomes and healthcare sustainability This innovation is sustained by medical education and personalized training for surgeons, which allows us as well to expand our sales reps and team across the different geographies and across the different business line. this innovation is sustained by medical education and personalized training for surgeons which allows us as well to expand our sales reps and team across the different geographies and across the different business line The effect of this expansion and careful execution is that we can maintain very strong financials. the effect of this expansion and careful execution is that we can maintain very strong financials We have seen a very strong soaring of our profitability, operating cash flow and dividend. The expansion of the Adjusted EBITDA while growing at this pace is really extraordinary. The record net profit of EUR 95.5 million, which represent now 14% of revenue. An increase of our operating cash flow by more than 42% to more than EUR 150 million. As we said before, proposed dividend increase of almost 60% to CHF 1.1 per share. Our goal, which is reflected in our short and midterm guidance, is to continue to outgrow the market for the foreseeable future. We have seen a very strong soaring of our profitability, operating cash flow and dividend. we have seen a very strong soaring of our profitability operating cash flow and dividend The expansion of the Adjusted EBITDA while growing at this pace is really extraordinary. the expansion of the adjusted ebitda while growing at this pace is really extraordinary The record net profit of EUR 95.5 million, which represent now 14% of revenue. the record net profit of eur 95.5 million which represent now 14% of revenue An increase of our operating cash flow by more than 42% to more than EUR 150 million. an increase of our operating cash flow by more than 42% to more than eur 150 million As we said before, proposed dividend increase of almost 60% to CHF 1.1 per share. as we said before proposed dividend increase of almost 60% to chf 1.1 per share Our goal, which is reflected in our short and midterm guidance, is to continue to outgrow the market for the foreseeable future. our goal which is reflected in our short and midterm guidance is to continue to outgrow the market for the foreseeable future I would like to thank for this excellent performance once again all our employees worldwide, of course, all our customers that continue to believe in our products, all our suppliers and partners worldwide. Thank you. Thank you really to all of you for the support. I think is now maybe time for Q&A. I would like to thank for this excellent performance once again all our employees worldwide, of course, all our customers that continue to believe in our products, all our suppliers and partners worldwide. i would like to thank for this excellent performance once again all our employees worldwide of course all our customers that continue to believe in our products all our suppliers and partners worldwide Thank you. thank you Thank you really to all of you for the support. thank you really to all of you for the support I think is now maybe time for Q&A. i think is now maybe time for q&a

Speaker 6: Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question comes from Sam England of Berenberg. Please go ahead. Thank you. thank you This is the Chorus Call conference operator. this is the chorus call conference operator We will now begin the question and answer session. we will now begin the question and answer session Anyone who wishes to ask a question may press star and one on their touchtone telephone. anyone who wishes to ask a question may press star and one on their touchtone telephone To remove yourself from the question queue, please press star and two. to remove yourself from the question queue please press star and two Please pick up the receiver when asking questions. please pick up the receiver when asking questions Anyone who has a question may press star and one at this time. anyone who has a question may press star and one at this time The first question comes from Sam England of Berenberg. the first question comes from sam england of berenberg Please go ahead. please go ahead

Speaker 7: Hi, guys. Thanks for taking the questions. The first one, can you just provide some color on what's changed over the past few months to support the increase in the midterm revenue guide? I suppose in particular, which segments or geographies are now expected to perform better than your previous expectations to support the raise? Then also around the midterm guide, you're now guiding to a gradual improvement in margins. Can you talk about the shift in messaging there and why you're expecting margins to expand? I think previously when you've talked about it, you said you'd rather reinvest in the business to drive growth as opposed to letting margins expand. Is there a shift in focus implied there? A little bit of color around that would be good as well. Thanks. Hi, guys. hi guys Thanks for taking the questions. thanks for taking the questions The first one, can you just provide some color on what's changed over the past few months to support the increase in the midterm revenue guide? the first one can you just provide some color on what's changed over the past few months to support the increase in the midterm revenue guide I suppose in particular, which segments or geographies are now expected to perform better than your previous expectations to support the raise? i suppose in particular which segments or geographies are now expected to perform better than your previous expectations to support the raise Then also around the midterm guide, you're now guiding to a gradual improvement in margins. then also around the midterm guide you're now guiding to a gradual improvement in margins Can you talk about the shift in messaging there and why you're expecting margins to expand? can you talk about the shift in messaging there and why you're expecting margins to expand I think previously when you've talked about it, you said you'd rather reinvest in the business to drive growth as opposed to letting margins expand. i think previously when you've talked about it you said you'd rather reinvest in the business to drive growth as opposed to letting margins expand Is there a shift in focus implied there? is there a shift in focus implied there A little bit of color around that would be good as well. a little bit of color around that would be good as well Thanks. thanks

Speaker 3: Thank you, Sam. I will take the second question on the margin expansion. We have seen that under an operational point of view, we can really achieve what we want to achieve in terms of growth with, at the same time, the ability to slightly expand margins. We were maybe a little bit cautious when we provided the previous guidance, and we wanted to have a little bit of space to operate. We believe we can achieve our midterm top line guidance while at the same time expanding margins. This means that we did identify, for example, some important synergies. Thank you, Sam. thank you sam I will take the second question on the margin expansion. i will take the second question on the margin expansion We have seen that under an operational point of view, we can really achieve what we want to achieve in terms of growth with, at the same time, the ability to slightly expand margins. we have seen that under an operational point of view we can really achieve what we want to achieve in terms of growth with at the same time the ability to slightly expand margins We were maybe a little bit cautious when we provided the previous guidance, and we wanted to have a little bit of space to operate. we were maybe a little bit cautious when we provided the previous guidance and we wanted to have a little bit of space to operate We believe we can achieve our midterm top line guidance while at the same time expanding margins. we believe we can achieve our midterm top line guidance while at the same time expanding margins This means that we did identify, for example, some important synergies. this means that we did identify for example some important synergies Stronger synergies between shoulder and sports medicine and joint and sports medicine both in terms of medical education, in terms of sales force, in terms of marketing. Those are not only positive under a practical point of view, but they do actually have an impact under a P&L point of view. I would maybe like to ask Corrado to take on the midterm CAGR, because it's probably more mathematical than anything else, given our past performance. Stronger synergies between shoulder and sports medicine and joint and sports medicine both in terms of medical education, in terms of sales force, in terms of marketing. stronger synergies between shoulder and sports medicine and joint and sports medicine both in terms of medical education in terms of sales force in terms of marketing Those are not only positive under a practical point of view, but they do actually have an impact under a P&L point of view. those are not only positive under a practical point of view but they do actually have an impact under a p&l point of view I would maybe like to ask Corrado to take on the midterm CAGR, because it's probably more mathematical than anything else, given our past performance. i would maybe like to ask corrado to take on the midterm cagr because it's probably more mathematical than anything else given our past performance

Speaker 1: Yeah, sure. Basically, the revision of the guidance, the CAGR, is the result of the super strong performance in 2025. The guidance that we gave for 2026. For 2027, it's just okay. We believe that the picture, the framework is not going to change. Basically based on our three-year plan, the result of the top line expansion in 2027 will be then based on this CAGR, three-year CAGR between 12% and 15%. It's just an arithmetical calculation, taking into account that 2025 was already achieved. The guidance for 2026 was given, so the result, based on what we see in the future, it should be between 12% and 15%. This is what we think, it's just an arithmetical update. Yeah, sure. yeah sure Basically, the revision of the guidance, the CAGR, is the result of the super strong performance in 2025. basically the revision of the guidance the cagr is the result of the super strong performance in 2025 The guidance that we gave for 2026. the guidance that we gave for 2026 For 2027, it's just okay. for 2027 it's just okay We believe that the picture, the framework is not going to change. we believe that the picture the framework is not going to change Basically based on our three-year plan, the result of the top line expansion in 2027 will be then based on this CAGR, three-year CAGR between 12% and 15%. basically based on our three-year plan the result of the top line expansion in 2027 will be then based on this cagr three-year cagr between 12% and 15% It's just an arithmetical calculation, taking into account that 2025 was already achieved. it's just an arithmetical calculation taking into account that 2025 was already achieved The guidance for 2026 was given, so the result, based on what we see in the future, it should be between 12% and 15%. the guidance for 2026 was given so the result based on what we see in the future it should be between 12% and 15% This is what we think, it's just an arithmetical update. this is what we think it's just an arithmetical update

Speaker 7: Okay, great. Thanks very much. Okay, great. okay great Thanks very much. thanks very much

Speaker 1: Yeah. Yeah. yeah

Speaker 6: The next question is from Ed Hall of Stifel. Please go ahead. The next question is from Ed Hall of Stifel. the next question is from ed hall of stifel Please go ahead. please go ahead

Speaker 2: Thank you very much for taking my questions. A couple from me. Just firstly on the profitability, and I appreciate you don't break it out in terms of sub-segments, but is it still fair to assume that the smaller units, extremity and spine, are operating at negative margin? If that is the case, when do you expect these to turn positive? That'd be my first question, then I'll follow up afterward. Thank you very much for taking my questions. thank you very much for taking my questions A couple from me. a couple from me Just firstly on the profitability, and I appreciate you don't break it out in terms of sub-segments, but is it still fair to assume that the smaller units, extremity and spine, are operating at negative margin? just firstly on the profitability and i appreciate you don't break it out in terms of sub-segments but is it still fair to assume that the smaller units extremity and spine are operating at negative margin If that is the case, when do you expect these to turn positive? if that is the case when do you expect these to turn positive That'd be my first question, then I'll follow up afterward. that'd be my first question then i'll follow up afterward

Speaker 3: Yeah, I can take this, of course, under a qualitative point of view. Spine is not a negative contributor. It is dilutive versus the core business if you consider hip and knee, but it's not negative. Actually, it is improving year-over-year. That is maybe another element I should have mentioned before talking about margin expansions. The extremities is we basically have two product lines within extremities. One, which is the shoulder arthroplasty, which is extremely positive in terms of contribution margin. Then we have a sports medicine, which is in an earlier stage, and it does require probably more dedicated sales force. Yeah, I can take this, of course, under a qualitative point of view. yeah i can take this of course under a qualitative point of view Spine is not a negative contributor. spine is not a negative contributor It is dilutive versus the core business if you consider hip and knee, but it's not negative. it is dilutive versus the core business if you consider hip and knee but it's not negative Actually, it is improving year-over-year. actually it is improving year-over-year That is maybe another element I should have mentioned before talking about margin expansions. that is maybe another element i should have mentioned before talking about margin expansions The extremities is we basically have two product lines within extremities. the extremities is we basically have two product lines within extremities One, which is the shoulder arthroplasty, which is extremely positive in terms of contribution margin. one which is the shoulder arthroplasty which is extremely positive in terms of contribution margin Then we have a sports medicine, which is in an earlier stage, and it does require probably more dedicated sales force. then we have a sports medicine which is in an earlier stage and it does require probably more dedicated sales force I mentioned that there are some synergies, but it's definitely still negative and it will remain negative, although reducing the negative profitability year over year while we scale this business. It is still fair to say that the smaller business line are dilutive, but spine is not negative. Within extremities only, sports medicine is still negative, but is very small. I mentioned that there are some synergies, but it's definitely still negative and it will remain negative, although reducing the negative profitability year over year while we scale this business. i mentioned that there are some synergies but it's definitely still negative and it will remain negative although reducing the negative profitability year over year while we scale this business It is still fair to say that the smaller business line are dilutive, but spine is not negative. it is still fair to say that the smaller business line are dilutive but spine is not negative Within extremities only, sports medicine is still negative, but is very small. within extremities only sports medicine is still negative but is very small

Speaker 2: Okay, that's really clear. Just another question on sort of CapEx expectations for this year, given a lot of the expansion that you've done in your facilities in Switzerland is coming to an end. I'm curious as what that would look like as things stand today. Okay, that's really clear. okay that's really clear Just another question on sort of CapEx expectations for this year, given a lot of the expansion that you've done in your facilities in Switzerland is coming to an end. just another question on sort of capex expectations for this year given a lot of the expansion that you've done in your facilities in switzerland is coming to an end I'm curious as what that would look like as things stand today. i'm curious as what that would look like as things stand today

Speaker 3: I don't think, frankly, actually, I hope it will not come to an end because it will mean that we are significantly slowing down. As you know, the CapEx we are referring to, both manufacturing capacity and instrument are growth-related CapEx. We have quite ambitious plans ahead of us for the next five to seven years. We definitely need to continue to finish at least our expansion plans here in Europe. We will continue to feed the market with instruments associated with new customers generation. We do have new products launching expected in the second half, end of the year. We don't expect at all a decrease in our required CapEx. I don't think, frankly, actually, I hope it will not come to an end because it will mean that we are significantly slowing down. i don't think frankly actually i hope it will not come to an end because it will mean that we are significantly slowing down As you know, the CapEx we are referring to, both manufacturing capacity and instrument are growth-related CapEx. as you know the capex we are referring to both manufacturing capacity and instrument are growth-related capex We have quite ambitious plans ahead of us for the next five to seven years. we have quite ambitious plans ahead of us for the next five to seven years We definitely need to continue to finish at least our expansion plans here in Europe. we definitely need to continue to finish at least our expansion plans here in europe We will continue to feed the market with instruments associated with new customers generation. we will continue to feed the market with instruments associated with new customers generation We do have new products launching expected in the second half, end of the year. we do have new products launching expected in the second half end of the year We don't expect at all a decrease in our required CapEx. we don't expect at all a decrease in our required capex We might add a little bit more color in the future, in the next maybe yearly call at the end of H1, to share with the market a little bit more details of what we expect to do in the upcoming years in terms of CapEx needs and opportunities. We see a lot of opportunities and we are very happy actually to invest in our growth. We have a very good in our opinion return on invested capital and we are not afraid to invest in our future. We might add a little bit more color in the future, in the next maybe yearly call at the end of H1, to share with the market a little bit more details of what we expect to do in the upcoming years in terms of CapEx needs and opportunities. we might add a little bit more color in the future in the next maybe yearly call at the end of h1 to share with the market a little bit more details of what we expect to do in the upcoming years in terms of capex needs and opportunities We see a lot of opportunities and we are very happy actually to invest in our growth. we see a lot of opportunities and we are very happy actually to invest in our growth We have a very good in our opinion return on invested capital and we are not afraid to invest in our future. we have a very good in our opinion return on invested capital and we are not afraid to invest in our future

Speaker 2: Perfect. Thanks a lot. Perfect. perfect Thanks a lot. thanks a lot

Speaker 3: Thank you, Ed. Thank you, Ed. thank you ed

Speaker 6: The next question comes from Sandra Dicht of Octavian. Please go ahead. The next question comes from Sandra Dicht of Octavian. the next question comes from sandra dicht of octavian Please go ahead. please go ahead

Speaker 8: Yes, good afternoon, and thank you for taking my questions. I have also a few. Maybe I take them one by one. Sorry to follow up again on the margin topic, but, given what you just mentioned, is it fair to say that kind of the majority of the improvement is coming from scaling up the currently dilutive segment like the spine and sports medicine? Or do you also expect margins in the core hip and knee business to improve from the current levels? Yes, good afternoon, and thank you for taking my questions. yes good afternoon and thank you for taking my questions I have also a few. i have also a few Maybe I take them one by one. maybe i take them one by one Sorry to follow up again on the margin topic, but, given what you just mentioned, is it fair to say that kind of the majority of the improvement is coming from scaling up the currently dilutive segment like the spine and sports medicine? sorry to follow up again on the margin topic but given what you just mentioned is it fair to say that kind of the majority of the improvement is coming from scaling up the currently dilutive segment like the spine and sports medicine Or do you also expect margins in the core hip and knee business to improve from the current levels? or do you also expect margins in the core hip and knee business to improve from the current levels

Speaker 3: Thank you, Sandra, for the question. We actually see both effects. We definitely have still margin improvements on the core business of Medacta, the hip and knee. We do see as well, as I was mentioning, a less dilutive effect from spine. Shoulder is definitely continued to expand as well, its marginality. From those core business, we can now finance fully our sports med. It's both the effect of decreasing dilution of the smaller lines and still significant expansion on the core hip and knee side, both under a manufacturing and operational point of view, vertical integration point of view in manufacturing still. Thank you, Sandra, for the question. thank you sandra for the question We actually see both effects. we actually see both effects We definitely have still margin improvements on the core business of Medacta, the hip and knee. we definitely have still margin improvements on the core business of medacta the hip and knee We do see as well, as I was mentioning, a less dilutive effect from spine. we do see as well as i was mentioning a less dilutive effect from spine Shoulder is definitely continued to expand as well, its marginality. shoulder is definitely continued to expand as well its marginality From those core business, we can now finance fully our sports med. from those core business we can now finance fully our sports med It's both the effect of decreasing dilution of the smaller lines and still significant expansion on the core hip and knee side, both under a manufacturing and operational point of view, vertical integration point of view in manufacturing still. it's both the effect of decreasing dilution of the smaller lines and still significant expansion on the core hip and knee side both under a manufacturing and operational point of view vertical integration point of view in manufacturing still Some leverages because we still have some markets like U.K., Spain, Italy, Germany, where we are growing very, very fast, and therefore we can see some leverage on the fixed cost and improved marginality at country level. Some leverages because we still have some markets like U.K., Spain, Italy, Germany, where we are growing very, very fast, and therefore we can see some leverage on the fixed cost and improved marginality at country level. some leverages because we still have some markets like u.k spain italy germany where we are growing very very fast and therefore we can see some leverage on the fixed cost and improved marginality at country level

Speaker 8: Okay. Super. Thank you. One on your U.S. business. Excluding the impact from Parcus, 'cause I estimate that organic growth in the U.S. was in the mid-teens range last year, and that was certainly supported by your strong exposure also to the ambulatory surgical centers. You previously indicated that this ASC segment could grow around 25% annually, that you have some 40% of your U.S. business is already generated through this channel. Just from this tailwind from the ASC segment alone, that should make it relatively straightforward to sustain a mid-teens growth in the U.S. Is that the correct way to look at it, or are there any factors that could make it more challenging to have such a growth level going forward? Okay. okay Super. super Thank you. thank you One on your U.S. business. one on your u.s business Excluding the impact from Parcus, 'cause I estimate that organic growth in the U.S. was in the mid-teens range last year, and that was certainly supported by your strong exposure also to the ambulatory surgical centers. excluding the impact from parcus 'cause i estimate that organic growth in the u.s was in the mid-teens range last year and that was certainly supported by your strong exposure also to the ambulatory surgical centers You previously indicated that this ASC segment could grow around 25% annually, that you have some 40% of your U.S. business is already generated through this channel. you previously indicated that this asc segment could grow around 25% annually that you have some 40% of your u.s business is already generated through this channel Just from this tailwind from the ASC segment alone, that should make it relatively straightforward to sustain a mid-teens growth in the U.S. just from this tailwind from the asc segment alone that should make it relatively straightforward to sustain a mid-teens growth in the u.s Is that the correct way to look at it, or are there any factors that could make it more challenging to have such a growth level going forward? is that the correct way to look at it or are there any factors that could make it more challenging to have such a growth level going forward

Speaker 3: Yeah, unfortunately, it's a little bit more challenging than just automatically following the market trends simply because of sales force expansion. Without a sales force, you cannot capture this transition from hospital to ASCs. We have been actually further expanding our percentage of revenues in ASC versus hospital in the U.S. We are around now 45% compared to previous year, and we expect this to continue to be the case. You really need to think about sales force expansion as a key necessary driver for our growth in the U.S. We are covering between 2% and 3% market share in the U.S. Yeah, unfortunately, it's a little bit more challenging than just automatically following the market trends simply because of sales force expansion. yeah unfortunately it's a little bit more challenging than just automatically following the market trends simply because of sales force expansion Without a sales force, you cannot capture this transition from hospital to ASCs. without a sales force you cannot capture this transition from hospital to ascs We have been actually further expanding our percentage of revenues in ASC versus hospital in the U.S. we have been actually further expanding our percentage of revenues in asc versus hospital in the u.s We are around now 45% compared to previous year, and we expect this to continue to be the case. we are around now 45% compared to previous year and we expect this to continue to be the case You really need to think about sales force expansion as a key necessary driver for our growth in the U.S. you really need to think about sales force expansion as a key necessary driver for our growth in the u.s We are covering between 2% and 3% market share in the U.S. we are covering between 2% and 3% market share in the u.s We need boots on the ground to really spread Medacta message and cover surgeons that are transitioning from hospital to ASC. As well, we are starting, for example, to work with prominent academic centers, large hospitals. It's all about distribution. I think we have a very good products across the different business line that prove their ability to improve patient outcome. We need sales people and sales force, and that's the constant game for us across the different geographies and in particular in the U.S. Hiring good talent, sales people which are happy to jump on board and sell our product ranges. We need boots on the ground to really spread Medacta message and cover surgeons that are transitioning from hospital to ASC. we need boots on the ground to really spread medacta message and cover surgeons that are transitioning from hospital to asc As well, we are starting, for example, to work with prominent academic centers, large hospitals. as well we are starting for example to work with prominent academic centers large hospitals It's all about distribution. it's all about distribution I think we have a very good products across the different business line that prove their ability to improve patient outcome. i think we have a very good products across the different business line that prove their ability to improve patient outcome We need sales people and sales force, and that's the constant game for us across the different geographies and in particular in the U.S. we need sales people and sales force and that's the constant game for us across the different geographies and in particular in the u.s Hiring good talent, sales people which are happy to jump on board and sell our product ranges. hiring good talent sales people which are happy to jump on board and sell our product ranges

Speaker 8: Perfect. Thank you. Appreciate the details. Then I have a very quick one for Corrado on the tax rate, as it was just last year, a little bit higher than what I had expected. Can you help us? What a good tax rate level to assume going forward for Medacta Group? Perfect. perfect Thank you. thank you Appreciate the details. appreciate the details Then I have a very quick one for Corrado on the tax rate, as it was just last year, a little bit higher than what I had expected. then i have a very quick one for corrado on the tax rate as it was just last year a little bit higher than what i had expected Can you help us? can you help us What a good tax rate level to assume going forward for Medacta Group? what a good tax rate level to assume going forward for medacta group

Speaker 1: Yeah, sure. Hi, Sandra. Let's say the increase in 2025 is attributable to some, let's say, transfer pricing optimization policy that we have implemented at group level, which means that basically some of our tax assets that we accrued in the past have been now relieved in 2025. Given the higher tax rate in the other countries, this has generated an increase in the average group tax rate in 2025. This can be considered as a, let's say, a one-off effect because it's not that we are going to review again significantly our tax policy, but this was happening in 2025. For 2026 and 2027, I think that we should go down to 16%, more or less. We should be confirmed for the next two years. Yeah, sure. yeah sure Hi, Sandra. hi sandra Let's say the increase in 2025 is attributable to some, let's say, transfer pricing optimization policy that we have implemented at group level, which means that basically some of our tax assets that we accrued in the past have been now relieved in 2025. let's say the increase in 2025 is attributable to some let's say transfer pricing optimization policy that we have implemented at group level which means that basically some of our tax assets that we accrued in the past have been now relieved in 2025 Given the higher tax rate in the other countries, this has generated an increase in the average group tax rate in 2025. given the higher tax rate in the other countries this has generated an increase in the average group tax rate in 2025 This can be considered as a, let's say, a one-off effect because it's not that we are going to review again significantly our tax policy, but this was happening in 2025. this can be considered as a let's say a one-off effect because it's not that we are going to review again significantly our tax policy but this was happening in 2025 For 2026 and 2027, I think that we should go down to 16%, more or less. for 2026 and 2027 i think that we should go down to 16% more or less We should be confirmed for the next two years. we should be confirmed for the next two years The other change that we are still not able to judge in terms of The other change that we are still not able to judge in terms of the other change that we are still not able to judge in terms of Let's say impact on our tax rate is the application of Pillar Two from 2028. It is not feasible because today is not still 100% clear how this will be implemented in Switzerland. We don't think it's going to significantly change the tax rate from 2028 onward, but I would say that definitely 2026 and 2027, we should go back to 16% more or less. Let's say impact on our tax rate is the application of Pillar Two from 2028. let's say impact on our tax rate is the application of pillar two from 2028 It is not feasible because today is not still 100% clear how this will be implemented in Switzerland. it is not feasible because today is not still 100% clear how this will be implemented in switzerland We don't think it's going to significantly change the tax rate from 2028 onward, but I would say that definitely 2026 and 2027, we should go back to 16% more or less. we don't think it's going to significantly change the tax rate from 2028 onward but i would say that definitely 2026 and 2027 we should go back to 16% more or less

Speaker 8: Oh, super. Very clear. Thank you. Oh, super. oh super Very clear. very clear Thank you. thank you

Speaker 3: Good. Thank you. Good. good Thank you. thank you

Speaker 6: The next question comes from Michelle Buschler of Zurich Cantonal Bank. Please go ahead. The next question comes from Michelle Buschler of Zurich Cantonal Bank. the next question comes from michelle buschler of zurich cantonal bank Please go ahead. please go ahead

Speaker 5: Hello. Thank you for taking my questions. I have a question on geographic expansion. Would you give us some more color on the efficiency gains we can expect from the Italy facility? Also, I saw you mentioned a new subsidiary in India. Do you have plans on expanding to India? Thank you. Hello. hello Thank you for taking my questions. thank you for taking my questions I have a question on geographic expansion. i have a question on geographic expansion Would you give us some more color on the efficiency gains we can expect from the Italy facility? would you give us some more color on the efficiency gains we can expect from the italy facility Also, I saw you mentioned a new subsidiary in India. also i saw you mentioned a new subsidiary in india Do you have plans on expanding to India? do you have plans on expanding to india Thank you. thank you

Speaker 3: Yeah, I can take this question. I guess you are referring to our new operation facility, the distribution center in the southern part of Europe. This distribution center would potentially have a decrease in some of our shipping costs for southern part of Europe and a decrease as well in net working capital in stock that is currently distributed across different warehouses in the southern part of Europe, Italy, Spain, Switzerland, Austria, etc. We will be able to concentrate most of the stock in one location, reducing net working capital requirements, and at the same time, as I said, potentially reducing our shipping costs. Yeah, I can take this question. yeah i can take this question I guess you are referring to our new operation facility, the distribution center in the southern part of Europe. i guess you are referring to our new operation facility the distribution center in the southern part of europe This distribution center would potentially have a decrease in some of our shipping costs for southern part of Europe and a decrease as well in net working capital in stock that is currently distributed across different warehouses in the southern part of Europe, Italy, Spain, Switzerland, Austria, etc. We will be able to concentrate most of the stock in one location, reducing net working capital requirements, and at the same time, as I said, potentially reducing our shipping costs. this distribution center would potentially have a decrease in some of our shipping costs for southern part of europe and a decrease as well in net working capital in stock that is currently distributed across different warehouses in the southern part of europe italy spain switzerland austria etc we will be able to concentrate most of the stock in one location reducing net working capital requirements and at the same time as i said potentially reducing our shipping costs We will probably see an impact more in 2027 than in 2026, but it's definitely something that will help us to improve and constantly increase our margins. That's a good thing. Regarding India, if I address your first point, India will be, of course, a new venture. We are starting from scratch. Our products are not yet cleared under a regulatory point of view. It might happen any day now, any week, but you never know with the regulatory. You can wait another quarter, or maybe it's tomorrow. In any case, we are ready. We have prepared the market. We have hired some key people. We lined up distributors. We will probably see an impact more in 2027 than in 2026, but it's definitely something that will help us to improve and constantly increase our margins. we will probably see an impact more in 2027 than in 2026 but it's definitely something that will help us to improve and constantly increase our margins That's a good thing. that's a good thing Regarding India, if I address your first point, India will be, of course, a new venture. regarding india if i address your first point india will be of course a new venture We are starting from scratch. we are starting from scratch Our products are not yet cleared under a regulatory point of view. our products are not yet cleared under a regulatory point of view It might happen any day now, any week, but you never know with the regulatory. it might happen any day now any week but you never know with the regulatory You can wait another quarter, or maybe it's tomorrow. you can wait another quarter or maybe it's tomorrow In any case, we are ready. in any case we are ready We have prepared the market. we have prepared the market We have hired some key people. we have hired some key people We lined up distributors. we lined up distributors We started already to train surgeons on cadaver labs, and we can expect a good start. We have seen a very good appetite for our products in the Indian market, which is a rapidly growing market, probably around 10%-12% per year growth. Prices are okay, in line with some of the European markets. We can definitely start to compete, and we are ready to roll. We started already to train surgeons on cadaver labs, and we can expect a good start. we started already to train surgeons on cadaver labs and we can expect a good start We have seen a very good appetite for our products in the Indian market, which is a rapidly growing market, probably around 10%-12% per year growth. we have seen a very good appetite for our products in the indian market which is a rapidly growing market probably around 10%-12% per year growth Prices are okay, in line with some of the European markets. prices are okay in line with some of the european markets We can definitely start to compete, and we are ready to roll. we can definitely start to compete and we are ready to roll

Speaker 5: Thank you. Thank you. thank you

Speaker 3: Thank you, Michelle. Thank you, Michelle. thank you michelle

Speaker 6: The next question is from Graham Doyle of UBS. Please go ahead. The next question is from Graham Doyle of UBS. the next question is from graham doyle of ubs Please go ahead. please go ahead

Speaker 4: Afternoon. Thanks, guys. Just one for Francesco and then a couple quick ones for Corrado. Francesco, just on knee, it's been incredibly strong. We are seeing some launches from some of the bigger competitors over the course of this year. Do you think that they're more kind of catch-up launches and you're still ahead? Is there anything in the pipeline on knees that makes you quite excited in terms of your own developments? Just quickly, Corrado, on the guidance. The midterm guidance around EBITDA, nice to see that sequential improvement. Would you expect EBIT margins to improve, so after accounting for D&A? Afternoon. afternoon Thanks, guys. thanks guys Just one for Francesco and then a couple quick ones for Corrado. just one for francesco and then a couple quick ones for corrado Francesco, just on knee, it's been incredibly strong. francesco just on knee it's been incredibly strong We are seeing some launches from some of the bigger competitors over the course of this year. we are seeing some launches from some of the bigger competitors over the course of this year Do you think that they're more kind of catch-up launches and you're still ahead? do you think that they're more kind of catch-up launches and you're still ahead Is there anything in the pipeline on knees that makes you quite excited in terms of your own developments? is there anything in the pipeline on knees that makes you quite excited in terms of your own developments Just quickly, Corrado, on the guidance. just quickly corrado on the guidance The midterm guidance around EBITDA, nice to see that sequential improvement. the midterm guidance around ebitda nice to see that sequential improvement Would you expect EBIT margins to improve, so after accounting for D&A? would you expect ebit margins to improve so after accounting for d&a Is it fair, when I look at the top-line guidance, when we just work out the math, that we should expect something like 10% growth in 2027, if you hit the midpoints? Thank you, guys. Is it fair, when I look at the top-line guidance, when we just work out the math, that we should expect something like 10% growth in 2027, if you hit the midpoints? is it fair when i look at the top-line guidance when we just work out the math that we should expect something like 10% growth in 2027 if you hit the midpoints Thank you, guys. thank you guys

Speaker 3: Thank you, Graham, for the question. Just to make sure I address your first question on the knee correctly, which are the launches you would like me to comment about and to position our knee versus our competitors? Just to make sure we have seen the same things. Thank you, Graham, for the question. thank you graham for the question Just to make sure I address your first question on the knee correctly, which are the launches you would like me to comment about and to position our knee versus our competitors? just to make sure i address your first question on the knee correctly which are the launches you would like me to comment about and to position our knee versus our competitors Just to make sure we have seen the same things. just to make sure we have seen the same things

Speaker 4: Yeah. There's a couple of things from Stryker, and we're seeing a new platform from Smith+Nephew. As the Landmark Knee is one that's a little interesting. It doesn't look to be quite the same as what you guys have. It looks slightly different and maybe not as much functionality. But just to get a sense of how far you think the gap is between- Yeah. yeah There's a couple of things from Stryker, and we're seeing a new platform from Smith+Nephew. there's a couple of things from stryker and we're seeing a new platform from smith+nephew As the Landmark Knee is one that's a little interesting. as the landmark knee is one that's a little interesting It doesn't look to be quite the same as what you guys have. it doesn't look to be quite the same as what you guys have It looks slightly different and maybe not as much functionality. it looks slightly different and maybe not as much functionality But just to get a sense of how far you think the gap is between- but just to get a sense of how far you think the gap is between-

Speaker 3: Yeah. Yeah. yeah

Speaker 4: What you guys currently offer and where the competition is. Also, genuinely, what are you working on next? 'Cause you have led the way. What you guys currently offer and where the competition is. what you guys currently offer and where the competition is Also, genuinely, what are you working on next? 'Cause you have led the way. also genuinely what are you working on next 'cause you have led the way

Speaker 3: Yes. If we talk about Stryker, they've been presenting at the last academy a couple of weeks ago an expansion of their portfolio, which brings them on par with what Zimmer and DePuy and Smith & Nephew already did 3-4 years ago with their medial congruent insert. That is what they are about to launch, and frankly, was about time because they were the last, let's say, to join the club of the medially constrained liners. Which are still quite a bit different compared to our first generation ball-and-socket design, which was Sphere, and still a generation behind compared to SpheriKA, which has been further adapted in its shape of the patellofemoral joint. Some elements of the components of the design, which have been clearly adapted to kinematic alignment. Yes. yes If we talk about Stryker, they've been presenting at the last academy a couple of weeks ago an expansion of their portfolio, which brings them on par with what Zimmer and DePuy and Smith & Nephew already did 3-4 years ago with their medial congruent insert. if we talk about stryker they've been presenting at the last academy a couple of weeks ago an expansion of their portfolio which brings them on par with what zimmer and depuy and smith & nephew already did 3-4 years ago with their medial congruent insert That is what they are about to launch, and frankly, was about time because they were the last, let's say, to join the club of the medially constrained liners. that is what they are about to launch and frankly was about time because they were the last let's say to join the club of the medially constrained liners Which are still quite a bit different compared to our first generation ball-and-socket design, which was Sphere, and still a generation behind compared to SpheriKA, which has been further adapted in its shape of the patellofemoral joint. which are still quite a bit different compared to our first generation ball-and-socket design which was sphere and still a generation behind compared to spherika which has been further adapted in its shape of the patellofemoral joint Some elements of the components of the design, which have been clearly adapted to kinematic alignment. some elements of the components of the design which have been clearly adapted to kinematic alignment At the moment, we know they're starting to work on and they understand that they needed to redesign their knees, and I believe this will give us at least another 3-4 years, especially in Europe, even longer, of a window where we think we can definitely show how our different design is superior. Talking about the future, we are working on our future generation of products as well across knee portfolio, technology portfolio, hip portfolio, and we definitely look forward to come out with the next improvement, hopefully when our competitors will try to catch up in 3-4 years. As we all know, innovation is a very dynamic definition. At the moment, we know they're starting to work on and they understand that they needed to redesign their knees, and I believe this will give us at least another 3-4 years, especially in Europe, even longer, of a window where we think we can definitely show how our different design is superior. at the moment we know they're starting to work on and they understand that they needed to redesign their knees and i believe this will give us at least another 3-4 years especially in europe even longer of a window where we think we can definitely show how our different design is superior Talking about the future, we are working on our future generation of products as well across knee portfolio, technology portfolio, hip portfolio, and we definitely look forward to come out with the next improvement, hopefully when our competitors will try to catch up in 3-4 years. talking about the future we are working on our future generation of products as well across knee portfolio technology portfolio hip portfolio and we definitely look forward to come out with the next improvement hopefully when our competitors will try to catch up in 3-4 years As we all know, innovation is a very dynamic definition. as we all know innovation is a very dynamic definition If you stop to innovate, you become a commodity and an older product relatively soon. We cannot stay still, and we are already very active in developing the next generation. I hope I addressed your question, and I would then leave the floor to Corrado. Yeah. If you stop to innovate, you become a commodity and an older product relatively soon. if you stop to innovate you become a commodity and an older product relatively soon We cannot stay still, and we are already very active in developing the next generation. we cannot stay still and we are already very active in developing the next generation I hope I addressed your question, and I would then leave the floor to Corrado. i hope i addressed your question and i would then leave the floor to corrado Yeah. yeah

Speaker 1: Yeah, sure. Let's speak a bit about the midterm guidance. We wanted to update both top line, of course, and EBITDA margin. I will start from the top line again. As you know, we have done 18.5% in 2025, which means that we have also guided for 2026, 10%-14%. Let's say the following scenarios happen. If we say that we perform 10% in 2026 and 10% in 2027, then the midterm would result into something in the region of 12% in the three-year plan, in the three-year CAGR. If we perform 14% in 2027 and 14% high end of the guidance in 2027, then you will finish to 15% more or less. Yeah, sure. yeah sure Let's speak a bit about the midterm guidance. let's speak a bit about the midterm guidance We wanted to update both top line, of course, and EBITDA margin. we wanted to update both top line of course and ebitda margin I will start from the top line again. i will start from the top line again As you know, we have done 18.5% in 2025, which means that we have also guided for 2026, 10%-14%. as you know we have done 18.5% in 2025 which means that we have also guided for 2026 10%-14% Let's say the following scenarios happen. let's say the following scenarios happen If we say that we perform 10% in 2026 and 10% in 2027, then the midterm would result into something in the region of 12% in the three-year plan, in the three-year CAGR. if we say that we perform 10% in 2026 and 10% in 2027 then the midterm would result into something in the region of 12% in the three-year plan in the three-year cagr If we perform 14% in 2027 and 14% high end of the guidance in 2027, then you will finish to 15% more or less. if we perform 14% in 2027 and 14% high end of the guidance in 2027 then you will finish to 15% more or less That's why we updated the range in the way we said before. Basically, I believe that something in the region between, say, 12%-15% is what we will expect based on the results and the guidance on 2026. Speaking about the EBITDA margin expansion, if you remember, we guided in 2024 to be stable at 2024 EBITDA margin. Last year, we updated the guidance. We increased this to 28%, which was already an expansion. Now, based on this year very good performance, we decided to update and guide again the further expansion in the coming years because there is, let's say, more or less half a point coming in 2026 and something similar in the region of 0.5 of a point again in 2027. That's why we updated the range in the way we said before. that's why we updated the range in the way we said before Basically, I believe that something in the region between, say, 12%-15% is what we will expect based on the results and the guidance on 2026. basically i believe that something in the region between say 12%-15% is what we will expect based on the results and the guidance on 2026 Speaking about the EBITDA margin expansion, if you remember, we guided in 2024 to be stable at 2024 EBITDA margin. speaking about the ebitda margin expansion if you remember we guided in 2024 to be stable at 2024 ebitda margin Last year, we updated the guidance. last year we updated the guidance We increased this to 28%, which was already an expansion. we increased this to 28% which was already an expansion Now, based on this year very good performance, we decided to update and guide again the further expansion in the coming years because there is, let's say, more or less half a point coming in 2026 and something similar in the region of 0.5 of a point again in 2027. now based on this year very good performance we decided to update and guide again the further expansion in the coming years because there is let's say more or less half a point coming in 2026 and something similar in the region of 0.5 of a point again in 2027 What we could see is an expansion of this size between 2026 and 2027. We didn't want to give a precise number because we believe that in this case, the cost and currency is difficult to apply because we are basing our calculations on 2024 currency rates, which we understand is difficult for you to follow. That's why we guided as gradual expansion in 2026 and 2027. What we could see is an expansion of this size between 2026 and 2027. what we could see is an expansion of this size between 2026 and 2027 We didn't want to give a precise number because we believe that in this case, the cost and currency is difficult to apply because we are basing our calculations on 2024 currency rates, which we understand is difficult for you to follow. we didn't want to give a precise number because we believe that in this case the cost and currency is difficult to apply because we are basing our calculations on 2024 currency rates which we understand is difficult for you to follow That's why we guided as gradual expansion in 2026 and 2027. that's why we guided as gradual expansion in 2026 and 2027

Speaker 4: Oh, thank you very much, guys. Thank Francesco for a really detailed answer. It was very helpful. Corrado, it was very clear on the revenue, so that's super helpful. Just on the margin, what I meant was more, it totally makes sense that EBITDA margins expand, but EBIT, so after you account for the cost of depreciation and amortization, would you expect EBIT margins to expand as well? Oh, thank you very much, guys. oh thank you very much guys Thank Francesco for a really detailed answer. thank francesco for a really detailed answer It was very helpful. it was very helpful Corrado, it was very clear on the revenue, so that's super helpful. corrado it was very clear on the revenue so that's super helpful Just on the margin, what I meant was more, it totally makes sense that EBITDA margins expand, but EBIT, so after you account for the cost of depreciation and amortization, would you expect EBIT margins to expand as well? just on the margin what i meant was more it totally makes sense that ebitda margins expand but ebit so after you account for the cost of depreciation and amortization would you expect ebit margins to expand as well

Speaker 1: I would give something similar in terms of expansion. More or less the same expansion of the EBITDA margin, you could use the same expansion for the EBIT margin. I would give something similar in terms of expansion. i would give something similar in terms of expansion More or less the same expansion of the EBITDA margin, you could use the same expansion for the EBIT margin. more or less the same expansion of the ebitda margin you could use the same expansion for the ebit margin

Speaker 4: Okay. Okay. okay

Speaker 1: More or less, we believe that the D&A should stay more or less in line with this year over the next year. That's why I believe that the EBIT expansion should be aligned with the EBITDA margin expansion. More or less, we believe that the D&A should stay more or less in line with this year over the next year. more or less we believe that the d&a should stay more or less in line with this year over the next year That's why I believe that the EBIT expansion should be aligned with the EBITDA margin expansion. that's why i believe that the ebit expansion should be aligned with the ebitda margin expansion

Speaker 4: Perfect. Thank you so much. That's really clear. Thanks a lot for the time, guys. Perfect. perfect Thank you so much. thank you so much That's really clear. that's really clear Thanks a lot for the time, guys. thanks a lot for the time guys

Speaker 3: Thank you. Thank you. thank you

Speaker 6: For any further questions, please press star and one on your telephone. The next question is a follow-up from Ed Hall of Stifel. Please go ahead. For any further questions, please press star and one on your telephone. for any further questions please press star and one on your telephone The next question is a follow-up from Ed Hall of Stifel. the next question is a follow-up from ed hall of stifel Please go ahead. please go ahead

Speaker 2: Thank you for taking my additional question. It was just a question on this year's guidance of 10%-14% in constant currency. If I do the math on last year's absolute revenue that you added on a constant currency level, it was around EUR 100 million-EUR 110 million. Now, if we look at this guidance for this year, the absolute number added is a bit of a step change down. I was curious as to what are the reasons for that? Is there a layer of conservatism in there? Is there product launches from competitors that you are taking into account? Or is there something that I am missing on that analysis? Any clarity there would be amazing. Thank you for taking my additional question. thank you for taking my additional question It was just a question on this year's guidance of 10%-14% in constant currency. it was just a question on this year's guidance of 10%-14% in constant currency If I do the math on last year's absolute revenue that you added on a constant currency level, it was around EUR 100 million- EUR 110 million. if i do the math on last year's absolute revenue that you added on a constant currency level it was around eur 100 million- eur 110 million Now, if we look at this guidance for this year, the absolute number added is a bit of a step change down. now if we look at this guidance for this year the absolute number added is a bit of a step change down I was curious as to what are the reasons for that? i was curious as to what are the reasons for that Is there a layer of conservatism in there? is there a layer of conservatism in there Is there product launches from competitors that you are taking into account? is there product launches from competitors that you are taking into account Or is there something that I am missing on that analysis? or is there something that i am missing on that analysis Any clarity there would be amazing. any clarity there would be amazing

Speaker 3: You know, I think that to take for granted that every year you can add EUR 100 million just because you did it the previous year, it's a little bit simplistic. As I said, we do have really to find and to feed sales force expansion and that's a constant effort. It's always a challenge to find those people at the speed we want. We think that 10%-14% remains very challenging. We do not expect, frankly, the market to continue to be that strong. You know, I think that to take for granted that every year you can add EUR 100 million just because you did it the previous year, it's a little bit simplistic. you know i think that to take for granted that every year you can add eur 100 million just because you did it the previous year it's a little bit simplistic As I said, we do have really to find and to feed sales force expansion and that's a constant effort. as i said we do have really to find and to feed sales force expansion and that's a constant effort It's always a challenge to find those people at the speed we want. it's always a challenge to find those people at the speed we want We think that 10%-14% remains very challenging. we think that 10%-14% remains very challenging We do not expect, frankly, the market to continue to be that strong. we do not expect frankly the market to continue to be that strong We have seen some markets as well with some price reduction that has been announced in France, in Belgium, in Japan, so you have to consider that as well. There are some elements that call for a little bit of caution, and I think 10%-14% remains a very substantial growth rate, especially again, compared to the market and to our peers. Can we do better? I think it's very challenging to do better, but we have been positively surprised ourselves in the last five years. I'm happy to be surprised by our performance every year, frankly. This is a number that we think is solid. It's challenging. It's difficult. We have seen some markets as well with some price reduction that has been announced in France, in Belgium, in Japan, so you have to consider that as well. we have seen some markets as well with some price reduction that has been announced in france in belgium in japan so you have to consider that as well There are some elements that call for a little bit of caution, and I think 10%-14% remains a very substantial growth rate, especially again, compared to the market and to our peers. there are some elements that call for a little bit of caution and i think 10%-14% remains a very substantial growth rate especially again compared to the market and to our peers Can we do better? can we do better I think it's very challenging to do better, but we have been positively surprised ourselves in the last five years. i think it's very challenging to do better but we have been positively surprised ourselves in the last five years I'm happy to be surprised by our performance every year, frankly. i'm happy to be surprised by our performance every year frankly This is a number that we think is solid. this is a number that we think is solid It's challenging. it's challenging It's difficult. it's difficult It's a battle every day to go and take market share. We are ready to fight this battle, of course, but we don't give it for granted. You know, the past year performance is not predictive of the future year performance, as you well know. It's a battle every day to go and take market share. it's a battle every day to go and take market share We are ready to fight this battle, of course, but we don't give it for granted. we are ready to fight this battle of course but we don't give it for granted You know, the past year performance is not predictive of the future year performance, as you well know. you know the past year performance is not predictive of the future year performance as you well know

Speaker 2: No, absolutely. Thanks a lot for that clarity. It's super helpful. No, absolutely. no absolutely Thanks a lot for that clarity. thanks a lot for that clarity It's super helpful. it's super helpful

Speaker 3: Thank you very much. Oh, sorry, Ed. Just another point. There was an acquisition as well last year, so let's consider that as well when you look at the absolute numbers. Thank you very much. thank you very much Oh, sorry, Ed. oh sorry ed Just another point. just another point There was an acquisition as well last year, so let's consider that as well when you look at the absolute numbers. there was an acquisition as well last year so let's consider that as well when you look at the absolute numbers

Speaker 2: Yeah, absolutely. Perfect. Thank you. Yeah, absolutely. yeah absolutely Perfect. perfect Thank you. thank you

Speaker 3: Yeah. Thank you. Yeah. yeah Thank you. thank you

Speaker 6: That was the last question. Gentlemen, back to you for any closing remarks you may have. That was the last question. that was the last question Gentlemen, back to you for any closing remarks you may have. gentlemen back to you for any closing remarks you may have

Speaker 3: No, I would like once again to really thank our team across the globe, our customers, suppliers and partners, because it's always tough to grow at this pace, and we try to do it in a very diligent way, which is even tougher. Congratulations to all our team members worldwide, and a big thank you for all our customers and suppliers. Thanks a lot. Thank you for your attention, and speak to you soon. No, I would like once again to really thank our team across the globe, our customers, suppliers and partners, because it's always tough to grow at this pace, and we try to do it in a very diligent way, which is even tougher. no i would like once again to really thank our team across the globe our customers suppliers and partners because it's always tough to grow at this pace and we try to do it in a very diligent way which is even tougher Congratulations to all our team members worldwide, and a big thank you for all our customers and suppliers. congratulations to all our team members worldwide and a big thank you for all our customers and suppliers Thanks a lot. thanks a lot Thank you for your attention, and speak to you soon. thank you for your attention and speak to you soon

Speaker 6: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you. Ladies and gentlemen, thank you for joining. ladies and gentlemen thank you for joining The conference is now over. the conference is now over You may disconnect your telephones. you may disconnect your telephones Thank you. thank you