Thank you, George, for your introduction. Ladies and gentlemen, welcome to Dermapharm's Q3 2025 webcast.

Thank you for joining us our call this afternoon. Our speaker today is our CFO, Christoph Dreibholz.

Christoph will guide you through the presentation, and afterwards, there will be time for Q&A. Christoph, the floor is yours.

Thank you, Britta. Good afternoon also from me.

My name is Christoph Dreibholz. I will guide you through the presentation, as Britta said, starting with slide 4.

To give you an overview what went well again in year-to-date September 25 has been our high-margin branded pharmaceutical segment comprising the three sub-segments: German Core, which accounts approximately for 60% of the branded pharmaceutical segment, the international business, another 20%, and Allergopharma, with also approximately 20% of segment gross sales. Whilst gross sales of the German Core were at prior-year level in the year-to-date period, international increased at approximately 10%, with main drivers and above-average growth rates being or generated in Spain, Poland, and the Ukraine.

Allergopharma gross sales increased year-over-year at 17%. Main products here are Allergovit, growing at approximately 15%; Acaroid, a mite product, has no marketing authorization and cannot be sold from October 25 onwards.

Remaining year-to-date gross sales were low single-digit millions. Allergo has a third product, NHD, Novo-Helisen Depot, also a mite product, which is authorized for sale, and we are promoting this product with doctors to replace Acaroid going forward.

The strategy shows promising results, with NHD growing at nearly 80% in gross sales year-over-year, generating already higher revenues than Acaroid. Vaccine-related revenues are low double-digit and largely result from our participation in the German pandemic preparedness program.

Q1 24 showed higher revenues of three quarters, covering also H2 23 retroactively. Hence, year-to-date September 25 is negatively impacted by approximately 6 million, and we will see this later in our bridge.

The optimization measures at axicorp are starting to show results with increasing contribution margin per piece. Volume has declined significantly, approximately 60% as of September 25 compared to average Q1 25, i.e., below initiating the improvement measures.

Reason for that is the delisting of low-contribution margin products from April 25 onwards. Contribution margin per piece has more than doubled in the same period.

We are also seeing a positive trend in monthly subgroup EBITDA results, which were positive and above prior year in July and September. Last but not least, the reduction of the low-margin axicorp revenues already had a favorable impact at group level, leading to an EBITDA margin increase of approximately 1 percentage point.

Arkopharma is working strongly on creating the new Arkopharma. If I say this, I have to point out once again that we are speaking of an EBITDA-positive business with a double-digit EBITDA margin.

Arko has, however, a lot of potential, and we and especially the local management team are working hard on transforming a good business to an excellent, sustainable business. That comprises a new and fresh presentation of Arkopharma, an increased communication of the advantages of our products, including underlying claims and the superiority and uniqueness of our manufacturing processes to customers and especially to the pharmacists.

Pharmacists are in the center of our approach as they heavily influence the decision of the end customer. We are in the process of employing medical trainers to communicate the scientific superiority of our products to the sales reps and pharmacists.

We have also an excellent R&D team who is in parallel working on new innovative products. We are also preparing the organizational setup to be able to grant challenges, i.e., incentives per unit, to the pharmacists from January 26 onwards.

All in all, 25 and H1 26 will be a period of transformation, and we are more than confident that Arkopharma will show a turnaround latest in H2 26. Slide 5, please.

We increased our net sales revenues in branded in Q3 25 compared to Q3 24 by 4% or approximately 6 million. This is excluding revenues from the vaccine business.

Branded grew slightly slower than in Q2 25, and other healthcare revenues declined by approximately 3% or 3 million over Q3 24 compared to a growth in the second quarter of 4%. As mentioned in the beginning, all sub-segments, the German Core, the international, and Allergopharma, contributed to this growth, while the main drivers of the decline in other healthcare in Q3 was again Arkopharma, following the increase that Arkopharma recorded in Q2 25.

Especially September was a difficult month for Arkopharma in all business units due to lower pre-orders. The increase in Arko's international business could only partially compensate for the performance of other BUs.

PI revenues are down by roughly a third in Q3 25 alone compared to Q2 24. As mentioned, Q3 24, of course.

As mentioned earlier, this decline is only volume-driven. Adjusted EBITDA group level increases by approximately a million or 1% in Q3 25.

FX impacts were negligible in Q3 25. Main driver is the gross margin, which increased by approximately 4 percentage points compared to the comparable period in 24, partly offset by higher share of personnel and other operating expenses.

Reported personnel expenses were 2 percentage points higher compared to Q3 24. The number of employees declined following especially the workforce reduction in parallel import, hence labor cost are the driver of the increase.

It has to be noted that personnel expenses comprise a restructuring provision of 2.1 million in Q3 alone. Total restructuring costs were 5 million in the year-to-date period.

Adjusted for these expenses, labor cost per FTE increase, inflationary driven, at approximately 2.5% in Q3. The ratio of adjusted personnel expenses to net sales increases by approximately 1 percentage point.

Earnings after tax development in Q3 standalone is driven by a lower negative financial result, this driven in Q3 by the valuation of our interest rate hedges. Slide 6, please.

Only points to mention here with regard to the year-to-date results in addition to the earlier explanations are that in Q1 25, we saw 6 million lower revenues compared to Q1 24 from the pandemic preparedness program, as mentioned at the beginning. This is related to the vaccine business, when Q1 benefited from vaccine-related revenues that economically referred to the second half of 23, as the contract was concluded in Q1 24, but retroactively starting July 23.

Furthermore, the favorable valuation of the swaps in Q3 25 balanced out over the year-to-date period, i.e., no meaningful impact on earnings after tax from the financial result. Instead, lower depreciation charges in year-to-date September and lower CIT expenses favorably impacted the earnings after tax result.

Slide 7, please. This slide breaks out main underlying drivers regarding reported EBITDA, financial result, tax expenses, and depreciation charges compared to year-to-date September 24.

Reported EBITDA change of approximately 4 million regarding axicorp subgroup is result of the reduced revenues from the portfolio optimization and personnel expenses of the employees where contracts have been canceled. The favorable impact of the latter is trailing behind the revenue reduction.

The remarkable underlying EBITDA growth of the remaining business is largely attributable to the German Core business, especially Allergopharma and the international units, as mentioned in the beginning, contributed to this development. One additional impact in year-to-date September 25 is the devaluation of the US dollar to the euro, with a approximately 4 million negative impact at EBITDA level year-over-year.

Considering this, the already remarkable underlying increase of the remaining business is even higher. This especially applies to the other healthcare business, in this case, where the decline of 3.7 million is entirely attributable to FX losses, i.e., the remaining entities in other healthcare compensate for the lower EBITDA generated by Arkopharma.

Net interest costs slightly declined compared to year-to-date September 24. The latter showed higher interest income from a settlement receivable in connection with a repurchase agreement, where interest income was recorded in Q1, covering also part of 23.

This negative impact has been netted by a favorable impact from the valuation of the interest rate hedges in approximately the same amount. Lower tax expenses and lower depreciation charges compared to the comparable period in 24 had a favorable impact on earnings after tax in year-to-date September 25.

Slide 8, please. This EBITDA normalization only comprise restructuring expenses relating to headcount reductions in Germany, mainly axicorp, France, i.e., Arkopharma, and Spain.

In the latter, we are speaking of single low double-digit number of employees concerned. Slide 9.

This slide shows net debt and the equity ratio development. Net debt has been continuously reduced over the last quarters, following the amortization payments regarding SynLoan tranche B with 25 million per semester and the scheduled repayments of the promissory note loan.

The increase as of September 25 is mainly driven by higher networking capital, mainly trade receivables, compared to June 25, and higher corporate tax payments. We had income tax payments of in total approximately 74 million in year-to-date September 25.

A large part of the tax payments relate to prior fiscal years, especially 22, where results have been impacted by the vaccine business. Leverage ratio is comfortably below 3 at 2.8 times, same as in Q2 and slightly below Q1 with 2.9 times.

The interest cover ratio, interest expenses compared to EBITDA, has again improved to 7.7 times from 6.9 in Q2. Equity ratio continuously increases due to positive results.

The dip as of June 24 and 25 is driven by the reclassification of the dividend to liabilities, settled beginning of July each year. Slide 10, please.

Our net assets and liabilities increased slightly to 2.117 billion over December 24, driven by increased networking capital in line with underlying seasonality and a higher cash number. The equity increase was generated in Q3 25.

June 25 showed an equity figure at the level of December 24, indicating that the dividend liability of 48 million, which had been reclassified and hence reduced the equity figure accordingly, was economically financed through the earnings after tax result generated in the first 6 months of 25. Slide 11, please.

Networking capital is at the level seen as of September 24, a reflection of the underlying seasonality in the business. The increase in trade receivables is largely offset by lower inventories.

Looking at the respective days shows that the ratios of inventories and trade receivables to sales remain largely unchanged, i.e., the underlying drivers, including growth in revenues, inflationary production cost increases, both in terms of labor cost and cost of materials, and the necessity to hold certain buffer stock, remain unchanged. DPO increases, cut-off driven, by 8 days to 70 days, June 25 72 days, with a favorable impact on the underlying cash cycle.

Slide 12, please. The increase of our cash flow from operating activities seen already in H1 25 continues in Q3 25, with a lower build-up of working capital in year-to-date September 25 compared to the comparable period in 24, partly also a result from the portfolio optimization at axicorp, with a reduced build-up of trade receivables and inventory in Friedrichsdorf.

Replacement capex of approximately 30 million is at a normal level. The remaining capex in the year-to-date September 25 period is driven by higher financial assets.

The resulting free cash flow of year-to-date September 25 is approximately 11 million lower than last year. Cash conversion is at 55%, down 1.1 percentage points.

Details of the improved operating cash flow are shown on the next slide 13. Whilst cash EBITDA continues to remain at a stable level compared to prior year, the favorable trend of operating cash flow is mainly impacted by the lower build-up of working capital in year-to-date September 25, as discussed before, partially netted by higher tax payments partly relating to historical financial years, as explained earlier.

With that, I'm coming to the outlook for the remaining quarter. The overall business shows a stable development compared to prior year, especially when eliminating the remaining impacts from the vaccine business, and main underlying drivers develop favorably.

Branded sees a remarkable growth across all sub-segments, more than compensating for the lower revenues from the vaccine production. Other healthcare is also above year-to-date September 24, excluding the negative FX result.

Operational KPIs as well as the subgroup EBITDA of axicorp show positive trends, indicating the effectiveness of the optimization measures introduced in April this year. This said, we have currently no indication that the budgeted ranges of 1.16 to 1.2 billion in revenues and 322 to 332 for adjusted EBITDA will not be met.

Thank you.

Thank you, Christoph. Now we hand over to you, George, to open the Q&A.

Good afternoon. Thanks for taking my question.

I currently have only one. When I'm looking at the year-to-date growth trajectory and consensus numbers and your guidance for the remainder of the year, that would imply at least to meet consensus 10% growth in fourth quarter or seven to meet the guidance mid-point.

Can you maybe give us some indication on what the building blocks would be? Because currently looks like more you're going to meet the lower end of the guidance, what would help to reach more the mid-point or the upper half?

Thank you.

Thank you for your question, Fabian. October went well, and in October we were ahead of budget.

November is typically a strong month if thinking of the vitamins in our underlying business, especially the vitamin D, and vitamin D is still one of our top five products. Hence, there is a seasonality in the business, and considering this, we indeed, as mentioned on the outlook slide, are very comfortable that we will meet the guidance and not only at the lower point.

That's great. Thank you.

sorry, I actually had the same question. Just so because the last two years Q4 was slightly weaker than Q3, you've said Arkopharma had a pretty bad September due to sell-in.

Has that also turned around in October, maybe, or?

September is indeed a strong month for Arkopharma. This is an unfortunate impact on the year-to-date period, but not something that will specifically impact the last quarter.

What we've seen is that Arkopharma also had a good October.

Okay. Fine for me, thank you.

Thank you very much, George. Thank you for joining us on this afternoon.

In case there are any questions left open, please get back to me afterwards. Thank you.

Bye-bye.

Thank you.