This is the Chorus Call conference operator. Welcome and thank you for joining the Medacta Group first half 2025 preliminary unaudited revenue 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 Group. Please go ahead, sir. Thank you. Thank you very much. Welcome, everybody, to this conference call. I'm here with Corrado Farsetta, our CFO, and Anja Pomrehn, our Investor Relations. We can probably start on slide number four, where we see the relevant numbers in terms of top line. We reached EUR 344 million, which represents almost 20% growth in constant currency or 19.2% in local currency. I'm very pleased, of course, with the top line growth. This is very much linked to the core pillars of our growth, which remain always the same. First mover innovation, out-of-thinking innovations, which is the core of who Medacta is. This innovation is very well supported by our medical education and personalized training of our customers, surgeons worldwide. This resulted as well in both a short-term 2025 full-year guidance upgrade and a midterm guidance upgrade as well. If we move to slide number five, we can see how this first semester of 2025 represents a further acceleration. It's already very sustained between H1 2021 and H1 2025. As I said, almost 20% in constant currency. This represents a very good performance, which is between 4% and 5% higher than the total market growth. If we go to slide number six, we can see the three pillars of our growth, the two I mentioned before. The out-of-the-box innovation, which is actually very relevant across all our core lines. Those innovations are well supported by our medical education programs. At the same time, thanks to this success, I would say both in terms of products and services, we are constantly expanding our sales team. As a consequence, of course, we need to expand our operations all over the world. Those are the three core pillars of our growth, and all are relevant for our both short-term and midterm growth. If we move to slide number seven, we can see the geographical split of our 20% growth. I'm very pleased with the overall performance across all geographies. We had an exceptional growth in the past in Europe. It was difficult to continue to keep up with this pace, but with almost 16% growth, the EMEA region, which is almost 50% of Medacta's geographical split. North America did quite a bit at 21.5%. This is basically the U.S. market. Asia Pacific as well, more than 25% growth, mainly driven by the very strong performance in Australia and in Japan. Then the smallest segment, the Latin America, where we are expanding very rapidly, almost 48%. This is the geographical split. As you can see, it's a very strong performance across all geographies. We have a very well-distributed growth across those regions. If we move to slide number eight, we can see the same 20% growth split across the product lines. Our Hip product portfolio grew more than 11%, 11.5%. Very good performance in more of a Medacta mature market. The Knee is close to 24% in H1. Extremities, 44%. Spine close to 19%. Once again, extremely pleased with the performance across all the key product lines within the Medacta portfolio. Maybe digging a little bit more into the details on the product portfolio. If we analyze on slide nine, the double-digit growth in Hips, we can mainly attribute this growth to our continued focus on anterior minimally invasive surgery, which remains a very attractive platform across all our geographies. In particular, of course, in our ambulatory surgery segment within the U.S. At the same time, we've seen another strong acceleration in both the performance as well. This 11%+ growth represents almost three times the market growth that we expect for 2025 full year. Again, very pleased with this performance. On slide 10, we can see the notable expansion we have in Knees. This is very much linked to the overall ecosystem we created around kinematic alignment, which is based on our GMK SpheriKA, our new and first KA-optimized implant. It's a very unique design with some features that are unique at the moment in the market. It is sustained not only, of course, by the originality of the implant design, but as well by technology. Our digital platform accounts for almost 40% of our GMK-implanted, or knees-implanted, worldwide, and single-use instruments. Most important, of course, our medical education associated with this innovative and personalized technique, which is delivering a very good clinical benefit, which is becoming more and more well-sustained by the scientific literature, which is coming out from different sources worldwide. If we move then to the next slide, the next vertical is Spine. Almost 19% year-over-year growth. As we know, Spine is a very, very competitive market with a lot of players, a lot of focused, only Spine players. To outgrow the market more than five times is definitely a very good performance. We rely on our technology here again, our MySolutions Ecosystem, with both the MySpine, the 3D-printed guides, and the NextAR Spine modules, which are clearly driving our success and our ability to be different and add value to our customers through our technologies. We're very pleased. This was a very important confirmation that our strategy is actually well-perceived by our customers worldwide. We had a very good success in EMEA, in APAC, and we are accelerating quite a bit in the U.S. We are very pleased with that line as well. Last but not least, with its 44% year-over-year growth, is our Extremities segment. This includes both our shoulder arthroplasty as well as our sports medicine segment. The sports medicine, of course, profited from our very recent acquisition. We mentioned 1.2% of our 20% growth at group level was associated with the Parcus a cquisition, this U.S.-based company that Medacta acquired late in March. This excellent acceleration, of course, is partially driven as well by this contribution. The core and organic growth remains close to basically 35% year-over-year. A very, very good performance and testament to that the combination of both our arthroplasty with NextAR continues to drive significant market share gain. Our sports medicine strategy starts to gain momentum as well. This is something we expect to continue in the next semester. If we move to slide 13, we can see a little bit more in detail the outlook upgrade, both for 2025 and for the midterm outlook. For 2025, we have increased our revenue growth guidance from 13% - 15% range now to 16%- 18% in constant currency. At the same time, given the extra marginality and contribution margin associated with this acceleration, we can forecast an adjusted EBITDA margin of around 28% while previously it was 27%. This is, of course, before any currency effect. It does include the recent Parcus position. Of course, if something changes drastically, it remains subject to unforeseen events. At the same time, we have seen, as I mentioned to you, that some of the verticals are extremely well accepted in all the geographies. We feel that we are able to upgrade our midterm outlook as well. In terms of top line, the constant currency revenue growth is expected now to be in a slightly higher and larger range, so low double-digit to low teens, so 10%- 14%. The adjusted EBITDA margin targeted will be around the one of 2025, so 28%. I think this is an important update for all of us. The key messages for us after this first semester 2025 is that Medacta continues to surprise even ourselves in terms of the ability to achieve a very, very strong revenue growth, close to 20% in constant currency in this H1. This is absolutely linked to the significant innovation that Medacta is introducing in the market. It does introduce it in a very responsible and effective way through medical education. This attracts not only new surgeons, but as well constantly new salespeople that are expanding our ability to reach the large markets that are still underpenetrated by Medacta. Probably our Knee portfolio or Hip portfolio, which is the largest market share we have, is now touching maybe 10% global market share. There is still quite a lot of room for growth, both in our core lines and even more so in our smaller lines like spine, shoulder, and sports medicine. Our aim, given this success and the ability to further penetrate the market, is to continue to grow significantly above the market for the quarters, semesters, and years to come. Last, but not least, I think, especially after such a strong performance, I would really like to thank all our employees, who are going through some growth-related pain, our clients, our suppliers, and partners worldwide, that are absolutely critical to sustain such considerable growth. That's all from my side. We'll be happy to take any questions. This is the Chorus Call operator. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the touch-tone 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 of Stifel. Please go ahead. Hi, guys. Good afternoon. Congrats on a really solid result. A couple from my side. Maybe first for you, Francesco. If we look at the guide, clearly, for the first half, it's a very strong result. The guidance uplift of 300 basis points reflects that. If we look at the second half, outside of a slightly tougher comp in large joint, how should we be thinking about sequential trends into the second half? I've got two follow-ups. Yeah. As you said, last year's semester was exceptionally strong, especially in the last month of the semester across multiple lines. If you want, the very strong result in H1 is somehow a consequence of this acceleration. We have a very, I would say, a more difficult comp in H2 2025. At the same time, we remain very positive about the trend and the momentum, but a little bit cautious, simply because, you know, the past performance is not always the great or the best indicator of future performance, as we all know. I think 16%- 18% is an exceptional performance in orthopedics as a full-year performance. I think if we can achieve that, I think we will be definitely extremely, extremely pleased. Can we do a little bit more? I am not sure. That's the guidance we are confident on at the moment. I think it is extremely aggressive. I remember at the beginning of this year, 13% - 15% was considered quite aggressive by some investors and myself. Now we're just very pleased with the results, and we feel comfortable in adding some top-line guidance for 2025. You know, very aggressive, I would say. Perfect. Maybe, moving on to Knee. If we look at the composition of the growth, how much of that growth is trade-offs from sort of converted kinematic surgeons, you know, guys that have used the previous iteration of the SpheriKA? How many are these new surgeons essentially starting up? That'd be very interesting to know. Yeah. I would say that the growth you see is 99% driven by new surgeons, because the pricing premium of GMK SpheriKA over GMK is, relatively, it's not significant at all. This is clearly driven by new surgeons' acquisition, by far. I think in H1, you will see on the CapEx side, the instruments that have been introduced in the market have been significant as well. It is absolutely driven by new customer acquisition. Very clear. My final question is just on the EBITDA guide. I know this is a top-line print, so I hope you forgive me. Since you upped the guide, I'll try anyway. Could you just quantify, not talking about the actual EBITDA number, which will come later, but can you just quantify the effective tariff impact you guys have sort of seen per quarter or per semester? Also, help me understand because, I mean, at the face of it, with the effects headwinds and the tariffs, you'd expect maybe there to be some margin pressure, and you guys are increasing the guide on the adjusted level. I just want to understand what is kind of driving that, and if you could just help us quantify just so we can put that into our models for the second half as well. Yeah, I think it is very important to state that all Medacta products at the moment are not impacted by tariffs. Under the Nairobi Protocol, Medacta products are tariff-exempt. This remains a very important aspect seeing some comments and some analysts still ranking Medacta within companies at risk for tariffs. I don't understand it why. So far, we have not been impacted. The Nairobi Protocol, under which Medacta products should not be exposed to tariffs at the moment, is somehow, of course, helping us to further expand our margins. We can go more in detail, of course, in our full-year or mid-year results, but that is a very important clarification point that I'm happy to address. I forgive you for your question, and actually, thank you for that. Thanks. Just maybe one more clarification question. Just on Extremities, could you tell us what the Parcus contribution was and effectively what the pure organic component was in Extremities? If you take the top line, which is EUR 344 million, 1.2% of our growth was associated with the acquisition. It's basically, let's call it EUR 3.5 million, EUR 3.6 million. If you now go and look at the Extremities growth, you can see the growth rate. It probably would have been 35%, 36% pure organic. This is a combination of our core Medacta SportsMed products, but the vast majority of it is our Medacta shoulder arthroplasty system. Perfect. Thank you very much. Thank you, Dylan. Thanks a lot. The next question is from Sam England of Berenberg. Please go ahead. Hi, guys. Thanks for taking the questions. The first one's just on Hip. Growth obviously stepped up pretty notably in 2024. Just trying to understand if there was any particular geography that performed better than expected here or whether you did anything particularly notable around sales and marketing to drive the acceleration. I suppose, did sort of ASC shift in the U.S. also benefit in Hip as well, given that you called out demand for minimally invasive surgery as a driver in Hip? The second question is just around the decision to upgrade the midterm revenue guidance. I was just wondering whether it was confidence in any particular vertical for the medium term that's changed or whether it's just the generally strong momentum you're seeing in all product categories that led you to upgrade that guidance. Thanks. Yes. I think we went back to the foundational success of our Hips in many of the new or existing geographies, I would say. We simply realized that we stopped to sell our core products. While there are still significant segments of the market which are extremely interested, if we think about Japan or Australia, where Medacta has been somehow selling for so many years, we thought that the momentum was exhausted. We realized when this hit, we simply restarted the strategy, basic education. We are seeing that there is still tremendous appetite for the introduction of anterior approach. The same applies to the U.S. with the ASCs, to the European markets, especially in certain areas. If we think about the U.K. or Spain, where Medacta is growing fast but from a smaller base, they've been much less exposed to anterior approach. It's a much smaller segment of the market. There's still a lot of appetite for the Hip as well. It's not really a significant change in the product. It's just a revamping of what we know has been working. It's provided a very good knowledge in that. Our new product as well, coming on the Hip side. I think we can maybe comment about it September, October once some more news about new products introduction will be released. The ambulatory surgery centers in the U.S. are clearly further expanding. That's the trend that we are offering there. We are introducing more services in order to help surgeons to drive efficiencies from the 6,000+ existing ASCs in the U.S. We have seen other companies that are focusing more on helping surgeons to build new ones, which is something we do as well, but I think is much faster and much less capital-intensive to help surgeons to further accelerate in a profitable way the transition from hospital to ASCs. That's where we see a lot of momentum. I believe I, your two first questions, Sam, I don't know if you wanted for me to point out any area. Yeah, that was great. Thanks. Thank you very much. The next question is from Aisyah Noor of Morgan Stanley. Please go ahead. Hi. Good afternoon. Thanks for taking my question. My first one is a little bit similar to Sam's last question. It's on the midterm guidance upgrade. It wasn't that long ago that you presented to us your 2027 targets. I remember back at your full-year results, you had anticipated a bit of a slowdown going forward. I'm just curious what changed between now and September to give you this confidence on the durability of your growth. Is it the customer feedback, surgeon win rates? If you could quantify any metrics that you're seeing today that lead you to believe the 14% or the top end of that growth rate is achievable out to 2027, could it include acquisitions, for example? That's my first question. My second question, also on the midterm guide, maybe for Corrado, you didn't mention anything on CapEx. Can you just confirm this is unchanged from your prior kind of five-year average around EUR 300 million? How are you thinking about the capacity requirements to fund this growth between Switzerland and the U.S.? The third question is on Spine and the 19% growth, which is clearly significantly above market. We know that the market's not growing this fast. What are you seeing, what is it about your product portfolio that's resonating with your customers, and where are you taking market share? Is it from traditional procedures or perhaps other augmented reality solutions? Thank you. Thank you, Aisyah. I would say what we have done, I will take the midterm guidance and the Spine question. I will leave to Corrado the CapEx one. Otherwise, it's going to relax too much. The midterm guidance, what we have done, is basically based on two aspects. We have seen a significant acceleration in the top line. So 10%- 12% was probably correct and very much in line with this 13%- 15%. We all know that the larger a company becomes, the more challenging it is to keep up with the same percentages. At the same time, if we now have a top line which is between 16% and 18%, there's no reason why we should see this momentum slowing down significantly from this rate, down to 10%- 12%. We felt it was more in line with what we see in the market. Some of the products which are extremely successful in some geographies are not even introduced or available in other geographies, simply because of regulatory reasons. If we think about the Knee, just to name one of the key verticals of Medacta, we just got it cleared in Japan. We start from scratch there. It's not yet cleared in Australia. Those are two examples of where we think and we believe we can see in new geographies the same type of strong momentum we have seen in other markets such as Europe and the U.S. where we have already launched. We know that our pipeline as well remains strong with some significant add-ons across several verticals, the Knees on the technology side, the Hips, with new implants, new technologies. We're talking about two to three years, 2025, 2026, 2027, where we had some good confirmation that our innovation is very well perceived. We hope and we believe we can continue to see an accelerated growth. We felt comfortable in increasing the top line range. Of course, we do expect maybe a higher top line in 2026 and maybe tapering down in 2027. You know, personally, frankly, I was expecting a slowdown since many, many years. We are not slowing down, which is not a problem. I'm very happy with the Spine. Spine is another vertical which is doing extremely well, as you said, in a very competitive market that is not growing as fast. Pricing pressure, a lot of competition. I think what is really differentiating Medacta is the combination between implants and technologies, which puts Medacta in a different category despite our size. We are one of the, let's say, maybe 10 companies that are able to provide the implants and technologies at the same time. This is absolutely critical to differentiate yourself. You enter with NextAR with the optimized rod solution, and this results in a pull-through across all the product lines. We have some bundle programs which are happy. It all goes back to the foundational pillars of the growth of Medacta, which is out-of-the-box innovation when it comes to products. Meaningful innovation, especially in Spine, is not always the case. If you have meaningful innovation sustained by good medical education, then the results follow. Of course, to sustain this growth, the CapEx must follow. Here is maybe when Corrado can give you a little bit of guidance on the ratios between growth and CapEx. Yeah. Sure. Thank you, Francesco. Aisyah, this is Corrado speaking. You're right. We didn't touch the CapEx, but basically, we don't guide on CapEx. What I can say is that the ratio that we mentioned several times in the past, which is basically EUR 1 of additional revenue, EUR 1 of CapEx, is more or less confirmed. There could be some variability in these numbers driven by exceptional investments, for example, now with the buildings, with the expansion of our production facilities. This is a ratio that is confirmed. As always, the biggest chunk of our CapEx is composed by instruments. As Francesco said, since we are having a lot of new surgeons, you will see again a big number in terms of CapEx for new instruments. This is basically confirmed. We expect this not to change over the next years. Back to the point that the ability of the company to fund this, the CapEx, I would say definitely yes. The cash flow generated from our operating activities is really robust. If you take the numbers also of the past, you will see that we are able to self-finance all the investments we need to sustain even this very strong growth rate. This is more or less the ordinary picture. The leverage is very low. Even in a case where we would be not able, and it is not the case, but not able to finance the CapEx amount with the cash flow from operating activities, the very low leverage would give us, in any case, room to expand the debts and again to finance this CapEx. This is not a case. We don't think it's the case for the next years. Understood. Thank you very much. Thank you, Aisyah. The next question is from Daniel Jelovcan of ZKB. Please go ahead. Good afternoon, from my side as well. Two questions. The first one is focused on the Hip. You mentioned outstanding growth in North America and APAC. The question is, EMEA was obviously below that. Was there any reason, or is it just because probably your market share in Hip is already significantly stronger than in other regions? When I look at the results of Stryker, which is probably the gold standard, they grew 14.1% in the first quarter in Hips in constant currency, and they will report tonight, second quarter. Don't misunderstand, but they are much bigger, and you grew 11.5%, which is also much better than the market. The question is, could you grow more, like Stryker, with your size? I think you know how I mean the question. Thank you. First one. Yeah, thank you for the question, Daniel. I think I will be happy to grow as much as Stryker in the Hip organically. I don't believe it was fully organic. Comment eventually on that number. I believe Stryker is a very good company. They're doing an excellent job, and they are definitely significantly smaller in Hips versus Knees. I believe their programs of bundling as much as they can is helping them. They're doing a great job. That's what it is. I don't mind how they grow. I do care about how we grow. I'm very happy about this 11 point something percent. If you look at Johnson & Johnson, which is another very large, very competitive company, they had significant growth in Q2. We will see, actually, tomorrow. I believe in the next days, everybody else will publish their own results, and we will be able to compare. I'm sure that we are taking significant market share. I am even more confident that with the new products and new technologies that we are introducing on the Hip side, we can even further accelerate our market penetration in the U.S., in Australia, in Japan, and as well in Europe, where you correctly said we have already a very significant market share in certain markets. We are around 20% in Switzerland. We're number one in Austria. We have more than 10% in France. Of course, to keep up with those rates in Europe is a little bit more challenging. We're very happy with the overall results. Thank you. Thank you. Last question. Do you know your Medicare exposure indirectly, of course, in the U.S.? How many patients are reimbursed by Medicare? Is that a number that you don't have? I probably you have, but that would be interesting, especially when the blonde gentleman in Washington is doing another move. Yeah. The Medacta patients' population reflects the one of the U.S. market. In the orthopedic space, I would say it's probably around 70% Medicare, 30% private. This is the market, and the same applies to Medacta. Is there any risk of a cut there? It's politically very difficult, I guess. It's how would you react? I would say with the current president, there are many risks, and we will handle the situation as soon as they come. I would say when there are problems, there are always opportunities. Cuts in the Medicare hospital base will potentially create further acceleration in the ASC segment. The hospital will probably start to look more and more at efficiencies and offers that are sustainable under a healthcare system point of view, which is exactly our view. We know we are extremely successful in very difficult markets, like many European markets, and we know we can be extremely competitive, actually even more competitive than our larger U.S.-based companies. We will adjust faster and better if it comes. I'm really not particularly concerned about any potential change. As you said, this is always a big challenge when there are cuts in the healthcare system under a political point of view. We will see what comes. Yeah. Okay. Yeah. Oh, sorry. Yeah. You were around the round. No, no. Thank you, and congrats as well to this great quarter, semester. Thank you. Thank you, Daniel. The next question is from Graham Doyle of UBS. Please go ahead. Hi, guys. Thanks for that. Just one question. On the tariff point, it's quite an interesting point you make on Nairobi. I've just spoken with the other ortho peers, and they're not got, you know, they're assuming they're not exempt. That might be on slightly, like, older information. Have you got legal clarification that's the case? Is that the way you fully expect to be for the remainder of this year? It would just be good to get a little bit of a better understanding on that, please. Thank you. Yes, the line's quite bad. I don't know if you could, we can't hear you. Can you hear me well? I can hear you. I think we can hear you. You're just cutting in and out a little bit. Yeah. I was saying we just received two independent, and they both consider products within, with. Sorry, sorry. In the U.S. Go ahead. Oh, sorry, Francesco. I think I'm getting it from a couple of other people as well. I think you keep cutting in and out on your line. It's okay. I can speak to you after the call. That might be easier. Thank you. Francesco, can you repeat, please? Can you repeat once more your answer, please? Because the line was cut for some reason. Yes, Anja. Yeah. Your line is good. Yes. Maybe, Anja, you can repeat to Corrado. I mean, you all know. Yeah. So. The situation. Yeah. Basically, we had just a confirmation from two independent law firms in the U.S., and they both confirmed that our products are definitely falling into the categories treated and mentioned in the Nairobi Protocol. This is something which is, clearly, I would say, understood and accepted in this sector. This is our understanding. We are 100% sure that our products are not subject to tariffs. Okay. That's very, very clear. You might hear more from the other companies over the next few days and next week. It's just that the previous guidance that they have out is assuming that they are not exempt. It's good to get that you've got that independent clarification. Thank you very much. Yeah. Yeah. Thank you, Graham. For any further questions, please press a star and one on your telephone. Mr. Siccardi, there are no more questions registered at this time. Thank you, everybody, for your time. I look forward to speaking to you all in September for our media results. Thanks a lot, everybody, and enjoy the summer. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.