Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Medacta Group 2022 Full Year 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, please signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Francesco Siccardi, CEO. Please go ahead, sir. Thank you. Thank you very much, and welcome everybody to this H1 2022 financial results. I will go through the slides together with Corrado Farsetta, Medacta CFO. If we move to the first slide, we can see the key numbers of the H1. We reported already in terms of revenues, a very strong performance above 14% in constant currency, up to EUR 211.3 million. In terms of EBITDA, we did reach EUR 58.1 million, equivalent to adjusted EBITDA of 27.5%. The profit for the period was EUR 25.6 million, with a cash flow of EUR 3.8 million. In the first semester, we did add approximately 80 new jobs within headquarters and the branches for a total of 1,421 employees. In terms of key highlights, the growth was, as I said, extremely strong. It is important. It is a growth which is all volume-based. We did gain, again, a significant portion of market share through new customer acquisition, which did come supported by a strong and actually accelerated sales force expansion, and supported as well by new product introduction across all the business line and across all the geographies. This growth did come despite some very strong pandemic restrictions at the end of H1, in particular in quarter one in Australia and U.S., which are very relevant in terms of margins, as we will see later. This will have an impact in terms of geographic mix. Compared to H1 2019, so pre-pandemic situation, the CAGR is almost at 11%, constant currency. It is now the second year in a row that we really have very strong true growth well beyond just the recovery of the pandemic situation. In terms of EBITDA margin, this 27.5% was impacted by some additional opportunities we had above our plans in terms of sales force expansion. It was negatively impacted by the geographic mix. As I said, Australia and U.S. were significantly impacted in quarter one, and those are high margin, high profitability geographies. We had some inflationary costs, especially on the transport side, and it did come with some FX effect, especially due to the dollar versus euro valuation. We compare this margin versus 2021 H1, which was extremely high, almost 32%, and this was highly inflated by non-recurring cost savings still linked to pandemic restrictions, lack of congresses, travel in particular, and other marketing and fixed costs. I am extremely pleased in terms of continued execution of our long-term value creation, which remains based on our key pillars of introducing constantly new products, supporting this innovation through very, very strong medical education programs. This is the reason why we are able to continue to attract and hire excellent sales force mainly coming from competitors. It is extremely important as well during this very, very complex moment and facing a very high growth, we did not face any supply chain issue. We did increase some of our stock, both in terms of instruments and both in terms of implant stock across all the line. I would like to thank all our people in the supply chain on a global scale that really did an excellent job in this difficult period. We did report already in terms of revenues. The revenue by product line did show an extremely good growth in terms of core business line. Hip and knee did grow at 11% and 16%, respectively, which is very, very significant growth compared to market. Extremities and spine did continue on their trajectory, which is as well significantly above market growth. Overall, what is more important, in my opinion, to understand in the next slide is the revenue bridge by geography, where we have seen really an extraordinary performance in Europe, which is collecting the great activity done in the last years, I would say, with a growth of 22%. We see the U.S., which did perform pretty well at around 11%, despite especially the first few months of the year in Q1 in particular, where we did still see a significant headwind due to COVID, and significant headwind is still there due to the inability of recovery some of the waiting list of patients mainly linked to staffing. Asia Pacific was as well unexpectedly impacted much longer than usual, especially Australia, where we have seen a very severe lockdown for almost four months of H1, while in Japan, the performance was, I would say, very much in line with our plans. Overall, it's shy of 4%, the Asia Pacific performance in terms of constant currency growth. 32%, in terms of our distributor, roughly, which brings us to our 14.5% in terms of H1 overall performance. This revenue geographic mix change, as we will see, will have at least partially an impact in H1 and potentially on the full year. I wanted to highlight with the next slide how the company is performing compared to pre-pandemic level. In H1 2022, the revenue was up 36.5% at constant currency from H1 2019. We are really growing compared to pre-pandemic level. Now is the second year that we are doing that, which represent a CAGR of almost 11% at constant currency. This is now a performance which is excellent across all the product lines and excluding the slowdown of hip and knees in 2020 did really perform well across all the lines. I would like now to ask Corrado to go into the details of the P&L and the marginalities, which factors have been impacting our marginality in H1 and how we see the development moving forward. Please, Corrado. Sure. Thank you, Francesco, and good afternoon, everybody. Now I would like to comment a bit on our results. I think that in summary, we have defended our profitability against several negative factors in this semester. Before we go through the numbers, let me draw again your attention to the geographic mix, which is a key element to read correctly this semester. Because if you look at the composition of our revenue, you see that Europe passed from 42% of the total revenue in H1 2021 to 45% of this semester. APAC, Asia-Pacific, did the opposite, from 24%- 21% of this semester, while the United States was stable at around 30% of the total revenue. Now, it is clear that given the big differences in prices between Europe and APAC, in this case, you can easily understand that this was the main driver of our margin reduction that you see in our profit and loss in this semester. We don't disclose precise number, but we can say that this is representing more than 50% of the total impact of this period. The other main element, which is always, unfortunately, present, is price erosion. Price erosion is normally offset by the growth in key markets, high price markets like Asia-Pacific and U.S., But this semester, this effect was not there, like in the U.S., or even negative for Asia-Pacific. Another small part of this reduction is attributable to the translation effect of the cost of goods sold, which is in Swiss francs and which is translated into euro. Given the devaluation of the euro, there is another portion of negative effect from that. Basically, the gross profit margin resulted in 70.2% compared to 72.5% of the previous year semester. In this regard, just a final comment to be done on instruments. Given the already mentioned strategic decision to increase our stock and instruments to avoid potential disruptions, we did not leverage on instruments because that should be, let's say, an expected effect given the big jump in revenue. We cannot say that compared to the past, there is a negative effect, but there was not a positive effect coming from leveraging the cost of the period of the depreciation associated to the instruments that we have in the market. If we move down to the OpEx, we see that there is an increase in the research and development. Just a comment. As you may recall, these numbers report also the depreciation and amortization referring to each line. So the big jump you see in the research and development amount is almost entirely explained by the research and development projects related to the MDR. That was, let's say, an activity which was completed in this part of the year. The sales and marketing costs, these costs are entirely driven by growth. You see here the sales force expansion mentioned by Francesco. You see also here the release of the COVID restrictions that were still in 2021 in terms of congresses, marketing activities and travels that are now back to the pre-COVID levels. For the first time, you see a big effect from inflation. In this line, you see also a negative effect from inflationary pressure on transport costs, the so-called fuel surcharge. Another effect which is difficult to measure because it is within the travel costs that are much more expensive than in the past. We see that more or less this is, we can say that there is a point that is attributable to inflation. As a result, the adjusted EBITDA was 27.5%. I wanted to mention that for the first time we have a negative effect from translation into euro, which is around 0.6%. So the constant currency, the margin would have been 28.1% in this semester. Moving down to the bottom line, we see the profit for the period was EUR 25.6 million. After financial results of EUR 1.9 million, which compares to a non-comparable zero in 2021, which benefited from extraordinary positive effects on our debt in U.S. dollar, which was the opposite this year. A comment on the tax rate, which in this period was equal to 15.5%, is back to a more normal rate after some extraordinary one-off effects in 2021, which were related to, you may recall, the MicroPort tax deductions in the U.S., where the tax rate is almost double of our average tax rate. That's a technical treatment, deferred tax assets and liabilities further to the introduction of the Swiss tax reform. They are not there anymore this year, so that's why we are back to a more normal 15% average tax rate. If we move to the next slide, we see the composition of the investments in this semester. You see that we invested roughly 66% of the total, equal to EUR 24 million in instruments, and other 23% that are roughly EUR 8.3 million in expansion of our capacity and buildings. We commented that 90% of our CapEx are driven by volume growth, because both instruments and spaces and production capacity are directly linked to growth. The remainder part is composed by research and development investments, and the other minor part of intangible investments. Moving to the free cash flow slide, you see that despite a so high level of investments, operating investments in instruments, the adjusted free cash flow was positive for EUR 3.8 million, while the reported free cash flow was negative for EUR 5 million. The difference is primarily attributable to the cost, the extraordinary investment for land, which we acquired this semester to expand the spaces here very close to Rancate, to our current site, and the settlement for legal claims that we had in the first semester, for roughly EUR 2.2 million. Now, moving to the last slide of my presentation. The net financial debt was EUR 123.6 million, with a leverage very low and stable at around 1x EBITDA. Just one note, there is an increase of EUR 30 million from last year's December 31st net debt, and EUR 10 million out of this EUR 30 million increase is attributable to currency translation effect on our debt. It's not cash that went out of the company. This was my last slide. Now I will give back to Francesco Siccardi for his comments on the outlook. Thank you. Thank you very much, Corrado. I would like to update you in terms of outlook for 2022. We are September now, so we have a little bit more visibility, both in terms of top line and I'm frankly very pleased with the direction the company is taking this year. Again, we do expect to be able to slightly beat the old guidance, so we want to update our guidance where we expect revenue growth in the range of 14%-16% at constant currency. While at the same time, linked to the geographic mix that we had, especially in H1, which we believe will be partially recovered in the second half of the year. Together with, of course, some of the inflationary costs we have seen already in H1 and, frankly, the higher than expected growth that brings together some fixed cost increase as well. The EBITDA margin is now expected to be slightly below the original guidance, so around 27.5% at constant currency. This compares, as I said, to our previous outlook of revenue growth toward 14% and an adjusted EBITDA towards 28%, and both were measured at constant currency. Overall, an acceleration in terms of top line with a slight decrease EBITDA margin associated with the factors we just mentioned. I would like maybe to go back to the operator and manage some Q&A session if there is question from the audience. Thank you. Excuse me. This is the 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 is from Chris Gretler with Credit Suisse. Please go ahead. Thank you, operator. Good afternoon, Francesco, Corrado. Great to speak to you. I had two questions, you know, just first on FX, you know. I understand your full year guidance is FX neutral, and you mentioned the 60 basis points in the first half, no? Now if we assume, you know, current rates, you know, is this a good guide for the full year as well? Or, you know, should it be, you know, kind of, you know, higher or lower? The second question relates to energy costs, you know. Could you maybe discuss your utility strategy, you know, for the plant in Switzerland in particular? Essentially kind of what you paid in the past, you know, maybe as a percent of sales, you know. You know, how your strategy looks like going forward, whether there you have any hedges in place or what will be the likely energy bill, so to say, for the next year or so, not just to give, you know, an order of magnitude. You know, I think obviously, you know, these energy costs are fairly volatile these days. I think, you know, the wholesale market in Switzerland is fairly unregulated, so it would be very interesting to know how you're positioned there. Thank you. Thank you. Thank you, Chris. I would like maybe to take on the second question while probably leaving the first question to answer to Corrado. In terms of energy, I would say we play on two key aspects. One, of course, is to try to manage the cost. Overall, the impact of energy in terms of cost of goods is actually relatively small, almost negligible, I would say. We do still expect an increase of cost roughly around 50% in the second half of the year for the energy portion only. But this is significantly less relevant than any other inflationary costs we mentioned, for example, transportation, which is way more impacting our overall EBITDA and profitability. In terms of cost of goods, I did not have a request, a calculation simply because it would be probably less than 0.1% in terms of costs. We can maybe address this, the first question, Corrado, on the effects on the full year. Sure. Hi, Chris. Yes, 0.6% is the effect that we measured in this semester. Now, assuming, of course, that, let's say, there are no changes because that's the assumption that we can do now. No changes in the current situation or effects, currency evolution. Assuming what we expect to be the geographic mix in terms of currency, ex-FX same revenue in local currency. I think that it is reasonable to say that the expected full year success effect can be in the region of 0.3%-0.5%. Okay. Good. Thanks a lot. Thank you. The next question is from Sandra Dietschy with Octavian. Please go ahead. Yes, good afternoon, and thank you for taking my questions. My first question would be on the NextAR. So you launched that in shoulder in the first half year, and you mentioned that you have placed more than 100 platforms. Now, can you give us some color on what the impact from that is on your shoulder sales and what we can expect from the launch in knee and spine later this year? The second question is again, back to the margin. Could you elaborate a bit more on what's the impact on the margin from the cost inflation versus the impact from investments into the sales force? Thank you. Thank you, Sandra. The NextAR. The NextAR has been introduced at the end of H1, so we are just, you probably remember, I think we announced that in May. That was the full release of shoulder. We see a big demand. That's why we were able to place this significant number of machines in the market. The feedback. The demand was already big, and the feedback of the new customers, especially on the shoulder, is excellent, which is something you see in terms of continuous growth on the extremity line, which is mainly shoulder at the moment. We just got clearance as well as you have probably seen in Japan, which is interesting. The first Japanese surgeons are going through their training session. U.S. and Europe were already cleared. We still miss Australia, but where we don't have implants yet regulatory cleared. This is something we are working on and hopefully get some traction in 2023. Knees and spine, we have a different situation, slightly different situation in different markets. We believe we are fully on track with our year-end full release of both knees and spine in Europe, where we have built a significant number of reference centers in knees and in spine. You know, our strategy is always to rely on key centers to be the base on which the future customer will go, see the technology, be trained and run, then the learning center. We are perfectly on track on this, and we will see the effect in terms of implant sales both in on the knees and spine, I would say in 2023 and an acceleration maybe in the last months of 2022. I would leave maybe the margin question again to Corrado to go into the details of how much is sales force and how much is linked to the inflationary cost increase, which today are mainly, I would say, transport costs. Because as I said, energy is relatively small, and we still don't see any raw material impact because we had a significant amount of stock both in terms of raw material and finished product. Maybe Corrado, you can add some flavors to that, please. Yeah, sure. On sales and marketing, what you see basically is a stability in terms of cost as a percentage of revenue, which shows the, what we mentioned, sales force expansion, because you see a big jump in the top line. I would say that if you measure the, let's say, the increase in absolute terms, what you can say is that the big part of the increase of cost is due to the sales force expansion and the ordinary, let's say, sales and marketing activity, which is now back to the pre-COVID level of activity. What I said is roughly 0.4%, 0.5% is the, let's say, the effect on that line of the inflationary cost, which is 90% of the number. 95% is transport costs that are increasing, and the rest is something which is sunk on the other travel costs that we cannot split between inflation or other costs. Of course, everybody now can bear testimony that if you buy a travel ticket, you see there is a big increase on those costs. Super. Thank you. Very helpful. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from [audio distortion]. Please go ahead. Good afternoon. I have a question regarding the cash flow generation. If I look at page 13 on the half-yearly report, not the presentation, the actual report. Once you adjust the cash flow for operating activities, basically at the same level and actually a little bit lower level for half year 2022 compared to 2021. I'm just wondering is that a reflection of a, let's say a higher cost of achieving growth? Is that something you are ready to sacrifice with the profitability to achieve higher growth? I've got a second question, which is regarding if you could. Actually, not a question. If you could explain again that transition effect on the debt that leads to an increase of debt of around EUR 9 million or EUR 10 million. Thank you. Yes. Basically, when we speak about cash flow, the adjustments are, let's say, attributable mainly to extraordinary investments, in this case, this semester, the acquisition of the land. Mm-hmm. Close to our current site in Castel San Pietro. Legal expenses, extraordinary legal expenses, or last year, if you see there is a big difference in the working capital amount, EUR 40 million last year, EUR 30 million this year. The big difference which was adjusted last year was EUR 80 million, which are referring to previous year's tax payments that were accrued but not yet paid. Basically what you see as an adjustment in the free cash flow is basically not affecting the profitability of the company, apart from some legal expenses, but that is the very small amount in this semester. You see it's a very low number. That is I think about the. I don't know if I answered the question. Back to your second point, which is the FX effect on our debt. We have our debt structure is, say, split between Swiss francs, euro, but mainly U.S. dollar. The reason is that we have intercompany debt between our U.S. subsidiaries and the Swiss parent company, Medacta International SA. Now, we cover against this amount of accounts receivable by turning our financial debt into U.S. dollar. Now, last year, the effect was positive because the dollar devalued. The amount of U.S. dollar translated into euro did show a positive effect, which offset the financial costs, which are always there. This year we have seen the opposite. The revaluation of course inflated our net debt, sorry, the financial debt in U.S. dollar, and this is a positive effect in terms of cost. Of course, those are unrealized effect because they are only translational effect, but that is what you see in our number when you translate into euro. There is another effect which is a financial specific effect in our, just to be a bit more specific, statutory balance sheet of the parent company, Medacta International, because we have all the debt, almost the entire debts are there. Which is when you have the year-end of the period and translation of the accounts into the Swiss franc. In this case, we have both effects. Both the FX effect and the translational effect on our, let's say, consolidated accounts that is in euro. Thank you. If I can add on this question. In general, to grow in orthopedics is very cash intensive. You see it on the CapEx side a lot in terms of instruments. Every new instrument is given to a new customer or a new product in the hands of an existing customer that potentially is doing hips with us and now with knees. This is purely growth related. It's not impacting on the CapEx side, of course, our profitability too much. Of course, there is below EBITDA some depreciation, which is linked to that. It's really capital intensive to grow fast in orthopedics. This is happening both in terms of instruments and as well in terms of stock of instruments, of implants of course. Especially in this period where the supply chain is potentially under stress. We even did some extra stock to make sure that we did not have any supply chain issues. This is even more eating our cash flow. It's all growth driven. If you will go down to zero, this is all cash you have at hand. Okay. Thank you. Once again, if you wish to ask a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Back to you for any closing remarks. Thank you. Thank you very much. If there are no further question, I would like once again to thank all the participants to this call today. Even more importantly, I would like to really thank all Medacta employees and customers that did support this very good performance once again in H1 2022, and look forward to speak with all of you again at the end of this second semester of the year. Thanks again and look forward to see you soon in person as well. Bye-bye. Thank you. Bye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your-