Good afternoon, this is the Chorus Call conference operator. Welcome, and thank you for joining the Medacta 2023 full-year preliminary on unaudited top-line figures 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 very much, and, good afternoon. I'm pleased to present today with Corrado Farsetta, our CFO, the full year 2023 preliminary unaudited top-line figures. In terms of highlights and areas of interest for last year, we are very happy and proud to report a very good performance in terms of top-line growth, close to 20% constant currency growth, over 16.8% reported, which allowed Medacta for the first time to pass the EUR 500 million mark, EUR 522.5 million in constant currency, or EUR 711 reported. This performance on top of our ability to gain market share, thanks to our different products and solution, was supported as well by some tailwind, mainly linked to the recovery of some of the backlog that was accumulated, mainly in the U.S. and the Australian market, and I would say mainly on the joint segment of our business line. The strongest growth, as we will see, occurred in EMEA, with a very, very good performance in APAC and a strong performance in North America as well. We managed to sustain this growth with an excellent supply chain performance. So not only we were able to deliver on our growth plan, but as well, we were able to capitalize on some additional opportunities in certain markets, thanks to the ability to capture this opportunity, supported by our supply chain. In the U.S., we did open a new distribution center in Memphis that is primarily designed to serve the U.S. market and its future growth, but in case of necessity, it will be helpful on a backup solution for the global market. We have started the expansion of both our manufacturing plants in Switzerland to support our future needs, both on the joint side and on the spine side. With our innovation, we have always been focused on medical education, and our M.O.R.E. activity has been very, very important to train all the new customers that have decided to start with our new techniques, new products in the different domain of the different business line. With the growth we have experienced, we had to increase as well our overall number of employees. We added close to 200 new jobs, I would say half in our headquarters and half in our branches. Of course, this includes a significant expansion of our sales force, which is not only formed by our employees, but as well, especially in the U.S. market, by independent agents, which are on top of the number of employees we have just discussed. If we go on the next slide, you can see in detail the numbers in terms of revenue bridge by geography. I mentioned extremely high growth in the European market, at 22.6%, followed by the excellent performance in the Asia Pacific area, with a very good bounce back, especially in Australia, after the COVID restriction of the previous year, close to 20%, 19.4% in APAC, and a very robust growth, close to 16% in the North American market. Quite a negative impact on the FX, but on a constant currency growth rate, 19.5%, as we mentioned at the beginning of our call. If we analyze our performance in terms of product line, starting from the largest segment on the hip side, we were delivering a 15.5% growth rate, still focusing in a very successful anterior minimally invasive surgery procedure, which continues to gain interest and momentum in the market on a global scale. We have expanded as well our activities in the hip revision segment, which is a segment Medacta was historically not present, and we are building our reputation in this segment as well. The knee, which is our second-largest segment, has been experiencing a tremendous growth over 23%. This is directly linked to our new approach to total knee replacement with this Kinematic Alignment, finally gaining what we believe is the right reputation. It is very rapidly becoming the new standard, a very, very prominent new topic in all the knee-related symposia all around the world. Medacta has been pioneering this approach, and now we have introduced in the market the first and only total knee implant specifically developed for this personalized technique. Behind the dedicated implants, there are, of course, technologies such as the MyKnee solution and the NextAR, which are coupled with our medical education. Once again, a very, very good package for surgeons that are not familiar with this technique and are willing to approach this area with the ability to rely on a very good medical education from the M.O.R.E. Institute and Medacta. The extremities and specifically our shoulder business is growing very fast as well, close to 34%. We are becoming, after a relatively short period of time, let's say five years, a key player in the shoulder market. We have been able to become the number one provider of shoulders in several European markets, Switzerland, Belgium, Austria. And this shows that on the product side, we have a very, very competitive product. We're not only talking about implant and an overall shoulder platform, but as well, very robust technology, both in terms of MyShoulder, our PSI solution, and the NextAR. In this category, sports med business is included as well. We have started to expand our commercial activity in the sports med side as well, and this will definitely contribute to our future growth in several years to come. The spine side has been probably less favored in terms of general tailwind, simply because the market suffered a little bit less in the past years. Very good performance, around 15%, slightly higher. Once again, here, it's very, very important to differentiate our product offering in a market that otherwise can be considered more and more commoditized. That's why technologies such as My Spine or NextAR are allowing Medacta to play on a different level compared to the several hundreds of spine companies providing cages and screws. So we are talking again about personalization, about planning and execution, which puts it in a different category, despite the relatively small market share that Medacta has with this less than EUR 50 million turnover, but a lot of potential that we see both in Europe, U.S., Australia, and Japan. I was very, very proud to see those numbers. If we compare our first year of Medacta as a public company, which was at the end of 2019, and despite the very complicated period we had had in front of us, Medacta was able to grow in a constant currency way up to 64%, and this is definitely even higher than what we expected back in the day. So with this growth, of course, our plans did change a bit compared to what we were expecting, but overall, I think we can be very satisfied so far of the company growth in general. If we go to the next slide, we can see that this tremendous growth has been generated throughout our product lines. The strategy we have been using in the last four years has been very consistent. In the hip, we have been focusing on anterior minimally invasive surgery, and the goal was to further expand into the revision, and this is exactly what we have been doing. On the knee side, we were already focusing on Kinematic Alignment, and now with the addition of technologies such as the NextAR, and of course, a dedicated implant for this new technique, we definitely have several years of an opportunity to be different and relevant and improving patient outcome in a very significant way on the knee side. Spine is growing. It's growing still fast. We have been able now in the last year, I would say, to start to exploit more and more the differentiating factor around the NextAR and still relying as well, quite a bit on our MySpine. So as I said before, it is extremely important to be different in spine and to be able to show that this differentiated product can deliver value to our customers and to our patients, and this is the reason why spine is growing well as well. And then the extremities. I have to say, this is an area where I am even more proud, because to start from scratch and to be able to become a market leader in some of the market in such a short period of time, it means that there is really a lot of value in what we have been developing, both in terms of implants, in terms of technologies, in terms of medical education, and as well in terms of partnership with the right key opinion leader on a global scale. I think this line will continue to develop in a very, very good way for many years to come. We have been able last year to open or to access, I would say, the Australian market, which was not the case for regulatory reason in the years before. And so there is an additional high value high technology market on top of Japan and U.S., that are going to continue to deliver growth for several years in our opinion. This was my last slide of the presentation, and I think we can go to the Q&A session. And again I will be more than happy to answer, and I'm here with Corrado as well, in case there are questions for him. Thanks a lot. 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 is from Dylan Van Haaften with Stifel. Please go ahead. Excellent. Hi, guys. Congrats on a very solid H2. So just two questions from my side. So first, maybe on the backlog, on the language, even though I don't per se see it in the organic growth numbers, it sounds like you're seeing a tapering of the backlog driven growth, whereas some of the peers in the U.S. orthopedic segment have actually issued pretty strong expectations on surgical volumes. So how do you contrast, let's say, the backlog driven growth and the, let's say, fundamental surgical different growth right now? And maybe as a second question, we've had a lot of debate with some investors on obesity and whether it's a risk or actually an opportunity. Maybe from your experience in the H2, do you actually feel that maybe some of the obesity driven drug referrals are actually coming through? And how are you guys thinking about that as a, let's say, as a headwind or as a tailwind? Thank you. Yeah, thank you for, for the question. I would say that we were expecting, probably differently from, some of our peers, the tailwind we have seen in, 2023. Definitely in some countries like, Australia and, probably in the U.S., mainly driven to the hospital staffing issues that, step by step, was, addressed and partially resolved, especially with the help of the ASCs. I would say in 2024, we do expect, maybe a little bit of tailwind, in the U.S., with still, a good demand, especially in the metropolitan area. Still recovering some of the backlog, but it is, something we, we still want to see, and probably is going to taper off in the second part of, 2024 quite a bit. There are some markets like the U.K., still Australia, where definitely the backlog is present, but there is a need for a support under government point of view, to put in place the resources to recover at a certain pace, this backlog. And we have seen the public to private programs in Australia. Now they're a little bit on a pause, maybe because of their summer break, but they've not been reannounced and reinstated yet. And then the NHS issues on the U.K., which is affecting us a little bit less because of our presence. But definitely there are some pockets of backlog that still needs to be addressed. I would expect definitely less in 2024 in terms of, tailwind compared to 2023, but I, I would be very, very happy, and we are prepared under a supply chain point of view in case, the tailwind remains strong. But I, I prefer to rely on what we can control rather than a general demand, which we are happy to see, and we will be able to handle. On the obesity aspect, I was not, particularly, worried about, the Ozempic, potential impact. If there will be an impact, I think time will tell. It's definitely not a short-term impact. It's impossible. OA is a, a degenerative disease. We are not treating patients because they just started to have arthritis one year ago, so it is impossible for me that there is an impact in any way, shape, or form in a short-term period. Then there are factors which are potentially reducing the indication for especially total knees. At the same time, there are other factors that will potentially increase the indication of total knees if patients become suddenly more active because they are in a better shape. Aging of the population remains the most important factor, and there are clear indications in terms of total knees in markets where obesity is clearly not a problem, like Japan, to give you an example. So I don't expect this to become a material impact, positive or negative in the short term, for sure, and if it will change, we will see it in probably five, seven years to come. That is, our view at this moment on this topic. Excellent. Thank you very much for taking my questions. Thank you very much. The next question is from Sandra Dietschy from Octavian. Please go ahead. Yes, good afternoon, and thank you for taking my question. So the first one would be on Europe, where your performance continues to be super strong. Can you maybe elaborate a bit on what is driving this growth? Is it any specific country in the region or any specific product segment? And should we assume this year, the growth rate from Europe and U.S. to converge, or do you expect the gap to remain on the level we have seen in 2023? And then the second question would be on product. So is there any specific launch in this year you are most excited about? And maybe you can also comment on the uptake of NextAR in the different segments. Thank you. Thank you, Sandra, for your question. So on the regional side, we definitely are gaining popularity in Europe as a consequence of probably some supply chain issues of our competitors across the different product lines for several, several months in all the countries or in most of the countries. This was probably linked to the bump in sales in other higher margin markets and their inability to serve all the demand they had, so they had to make choices. This has of course created quite a lot of frustration within the hospital community and the surgeon community, and our ability to serve them had demonstrated that we can be considered a very good partner and a reliable partner. On top of that, of course, the fact that we are growing, that we are becoming a more established player, we are gaining access in key university hospitals across Europe, and this adds to our credibility. So we see Europe still on a higher growth rate. To come to the second half of your question, higher growth rate, probably than the U.S. Maybe 2024 will still be the case. In general, of course, in Europe, we have, especially in certain countries, a higher market share, and therefore, sooner or later, this trend will change. There are no specific markets, I would say, with the exception of Switzerland, where our market share is already relatively large, so we cannot expect to explode at this pace. This performance was true in many, many markets, even the large markets, Germany, France, U.K., Spain, Italy, so Austria, Belgium. They were all performing extremely well across all the product lines. And I would say if you take the product lines growth rate, this is reflected basically across all the geographies, more or less in the same way. The second question on the product lines, I think in terms of excitement, we are definitely focusing on our knee performance, at least for the large joint. Kinematic Alignment has been finally seen as a way to go. And as our competitors, they start to launch or introduce their version of Kinematic Alignment, finally saying that we were not completely crazy. We have introduced a new dedicated implant, which is, in our opinion, an absolute game changer in terms of patient satisfaction, and we start to have data to support this. So we are launching the SpheriKA knee on a global scale. A few limitations which are regulatory driven in Japan and Australia for the moment, but this is definitely an area where we are going to see a lot of focus from our sales team. And it is part of our 25th anniversary programs in terms of symposia that we are planning for 2024 to celebrate the 25th anniversary of Medacta, and as well to mark the launch of this very, very important product. Of course, supported by technologies, such as NextAR and MyKnee, which remain a significant portion, close to 40% of our revenues, even in knees, are associated to technologies. So they remain fundamental. And NextAR specifically is going extremely well on the shoulder, where there is very, very little alternative in terms of competitive system in the market. Probably only Exactech has a very robust technology offering when it comes to NextAR on the shoulder. Back to the NextAR Spine is growing as well with both Europe, U.S., Japan starting to really pick up on this technology, which has some of the characteristics that matches the market need when it comes to ambulatory surgery center in the U.S., or very fragmented hospital, low volume, high number, which are typical of the Japanese market, for example. So in general, we see a very good momentum there as well. Great. Super helpful. Thank you. Thank you very much. The next question is from Thando Skosana with UBS. Please go ahead. Hi, thank you for taking my question, and congratulations, Francesco and Corrado. I had two questions, please, just around ambulatory surgical centers. I just would love to hear your comments around what you're seeing in terms of volumes there. And then also, you know, just the segments, the expansion within the segment. You know, your peers have been talking quite highly about the segment, so I just wondered if you're seeing any increased competition or there's still enough, you know, pie to share there. And then just in terms of the overall ortho market, it would be great to hear your views on the pricing environment and, and what you're seeing, both for the market and also for yourself. And if I could just squeeze a little bit of one more. Just backlog in Europe, and then also in the U.S., do you think it's gonna, you know, last until the end of the year, or we're probably gonna see that, deplete by half-year? Thank you. Yeah, the last question, to knock it off, immediately I addressed it before. I think our feeling, based on the commentary with surgeons and hospital, is that probably there is still a little bit that needs to happen, but we don't see a full year of backlog in the key markets at least. As I said before, Australia, maybe the U.K. will be an exception. On the second half of this year, I think we would normalize. The first question on the ASC, Medacta has been focusing on ambulatory surgery center in the U.S., probably earlier than most, and with products that have particular appeal to that market. And so we do have probably close to 45%-50% of our revenues, at least in the joint segment, in the ASC already. A very high proportion of our spine procedure are ASC-based, and as you probably know, now the shoulder has been cleared as well for ASC-based procedures. So we're definitely gonna see a shift and an acceleration on the shoulder side as well. We know as a fact that when surgeons start to do ASCs, if the let's say general conditions around, under an economic point of view, or there are no limitation, under a clinical point of view, they can easily do 80-85% of their activities, primary activities, of course, and not complex cases or revision, in ambulatory surgery center in a safe way after two or three years of activity. So we believe this is the right or the possible potential market for ASCs. Of course, it is a trend. It is a very visible trend. Competition is there as well. But I think we have some excellent products that have really an appeal for that market, like, single-use instruments, the right type of technology, the right techniques, minimally invasive techniques, and the right education as well to help patients do well in ASCs and surgeons do more patient in a very safe way with the support of those technology and this education. So this is our view at the moment. With the ASC, especially in the U.S., there is a potential for incremental price pressure, but there is, at the same time, the possibility for cost reduction. So overall, we might see, in the years to come, some incremental price pressure on the implant side. There might be some incremental savings on the cost side, and maybe some incremental revenue stream associated with some ASC or bundle payment initiatives down the road. Outside of the U.S. and outside of the ambulatory surgery center, the pricing pressure we have seen in 2023 was probably slightly lower than historical pre-COVID conditions. In 2023, we've been able, in certain areas, to increase our prices, which is something that happens very rarely. But in general, I think we will restart to see, once inflation stabilize, some incremental pressure associated with potential DRG and reimbursement changes as well.. Thank you. Thank you very much. The next question is from Anja Pomrehn from Mirabaud Securities. Please go ahead. Thank you. Good afternoon, Francesco. Good afternoon, Corrado. I'd like to follow up, first of all, on the pricing topic. Francesco, you just stated, in some areas you were able to increase prices. I mean, before, Medacta was always saying, on generally over a year, on average, the price cuts one has to expect lie between 2% and 3%. Now, going, looking into 2024, also in view that some of your competitors are also sort of indicating for a more favorable pricing environment in 2024. So what could one expect, sort of, in 2024, in terms of pricing pressure on average as an estimate? That would be my first question. Yeah, we are always very cautious when we talk about prices on a global scale. We know there will be potential incremental price cut. For example, in Japan, this has been pre-announced. We always put in our usual 2%-3% on a global scale, country by country, as part of our plans. We are always, of course, very careful in try not to concede on price, but at the same time, we have to be competitive in the market, and I would say we still see quite aggressive pricing policies from the same companies that say that they are not going to concede on prices. So it is a very competitive environment. We definitely don't sell based on prices, but we have to access a lot of competitive accounts by having at least the same price, and then try to beat them on service, on quality, et cetera. But in general, we still see this, maybe instead of 3%, 2%, price erosion. The ASC segment is definitely calling for more aggressive prices, and this is basically what we are prepared to handle in 2024 as well. Okay, thank you. The second question I have relates to a statement you said earlier in the presentation. You were referring to some headwinds in the spine, and I was wondering if you could provide a little bit more color to what these headwinds are and what measures you are sort of taking or can take, basically, in order to counteract these headwinds. Thank you. No, I think what I wanted to say is that in spine, there was definitely less tailwind than in joint. So the spine was probably less affected by this massive backlog of patients. This is, in any case, a significantly smaller segment of our business, as you know, roughly 10%. And in general, especially in the U.S., we saw less of a tailwind, but not a particular headwind, frankly. Okay, great. Thank you very much. Thank you very much. The next question is from Sam England, from Berenberg. Please go ahead. Hi, thank you for taking the questions. And the first one is, can you give us some thoughts around the speed and timing of the rollout for the new kinematic alignment knee implant? And then which markets are the nearest term revenue opportunities for it, and how quickly are you expecting the sales to ramp up? And then the second one was just around your hiring plans for 2024. Should we expect 10%+ headcount growth again for 2024, or were there particular areas of hiring in 2023 that you won't need to do again in 2024? Thanks. Yeah, the rollout of the Kinematic Alignment has been focusing first in the U.S., second in Europe. It is happening as we speak. So we have started in November last year, and we pre-launched in certain key centers in September last year. We had actually started to implant the SpheriKA, which is the name of the product, almost two years ago. We always do that. We do a kind of a limited market release. We collect clinical data. We are sure or reasonably sure that the performance is in line with our expectation, and then we start to create our reference center for medical education, and then we roll out. So we start to have robust two years data. We have started to roll it out in the U.S. We have several more symposia prepared in Q2, Q3, and Q4 of this year in Europe, U.S., Australia, and Japan. Specifically focused or including a strong focus on this new knee. So this is a ramp-up that is already in our numbers at the end of 2023, and they will contribute to continue to grow in 2024 for sure. The hiring process of 2024 will be very much in line with our last three years. If you look at our last three years, headcount increase is quite consistent, so this 10%, potentially slightly more, potentially slightly less, but 10% is a good rough estimate, is what we expect to continue to do. So we should end up at the end of 2024 with close to, let's say, 2,000 employees. There might be some changes if we accelerate our direct distribution in the U.S. rather than agencies, because once again, a significant portion of our sales force in the U.S. is independent agents, which is just based on the opportunity. There are some potential acceleration in the manufacturing side as well, because we are potentially bringing in-house a portion, at least, of the activities that are still partially outsourced, and this will help us on the cost of goods reduction. So there are some variation in this area, but overall, this 10%, across more or less the same function and the same geographies, which are, if you want, sales driven, so you can use the split of sales to have an estimate of this, split of headcounts, with roughly 50%, slightly less in the headquarters, and the remaining portion across the direct markets. Great. Thanks very much. Thank you very much. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Edouard Riva with ZKB. Please go ahead. Good afternoon, everyone. Thank you for taking my questions. Actually, I would have two of them. Did I understand correctly, you mentioned in the presentation that you would start to ramp up new products on the sports med part of the extremity segment. Am I correct? And if yes, what kind of product could you already give us a date? Should we expect that already in 2024, or is it for more long term? Thank you. No, you're correct. We are entering into the sports med segment with basically arthroscopic implants for the treatment of knee procedures like ACL reconstruction, meniscus refixation, ligaments, and soft tissue related products. The same applies for shoulder, for rotator cuff, some instrumentation and some hip arthroscopic products. So hip, knee, shoulder, those are already part of our offering, and on top of this, let's say, arthroscopic procedures in this line, we are introducing some patient-specific products. That's a little bit more technical. It's a procedure called periacetabular osteotomy, which historically was a very niche product. It is still a relatively niche product, but it is a very complex product, treating relatively young patients, the vast majority adolescent or the less than thirty years old patient. We have been introducing, both in U.S. and Europe, this very unique tool, where you can personalize the planning of those products with guides, implants, which are very specific, very unique, and those procedures are treated always in very high-profile academic centers and teaching institutes, which are a part of our key strategic offering and key strategy in general, to have a presence in those very important centers that are forming the next generation of surgeons. Those are areas where we believe we can make a difference with very innovative and interesting products. Great. Thank you very much. I would have a second question, which is, is there a reason why there are no NextAR for hip? Is it something that will be coming along? Yes, there is a reason, and I would say in the hip technology segment, even if you take our competitors, historically, the success has been very limited, simply because the hip procedures, especially if you're doing a lot of anterior approach as we do, the problem you really try to address is very small. So the investment in technology and the balance between the incremental cost and the incremental value is challenging, which basically did not drive our priority in terms of development in the hip space and forced us as well to really come up with solution that can be relevant for our customers. We have an ongoing project for the hip as well, and not only for the hip, but to be included in the NextAR, and this will be probably part of future conversation, moving forward. So an area of development for sure. Great. Thank you very much. Thank you. Mr. Siccardi, there are no more questions registered at this time. I turn the conference back to you for the closing remarks. Thank you very much. Then, I would conclude by thanking once again all our team around the world, our customers, our suppliers, that help us to achieve this amazing result in 2023. I look forward to present the overall company results in March, and hopefully continue to deliver in line with those numbers. So thank you very much. I look forward to speak to you all soon. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.